Fabrinet (FN)
Days of sales outstanding (DSO)
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Receivables turnover | 4.87 | 4.77 | 4.65 | 5.00 | 4.97 | 4.77 | 4.76 | 5.14 | 5.15 | 4.90 | 5.46 | 5.73 | 5.58 | 5.32 | 4.98 | 5.36 | 5.53 | 5.33 | 5.26 | 5.87 | |
| DSO | days | 75.01 | 76.51 | 78.47 | 72.99 | 73.38 | 76.53 | 76.65 | 71.08 | 70.88 | 74.55 | 66.91 | 63.72 | 65.36 | 68.56 | 73.30 | 68.14 | 66.02 | 68.42 | 69.41 | 62.17 |
June 30, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.87
= 75.01
Days Sales Outstanding (DSO) is a key ratio used to evaluate how efficiently a company is managing its accounts receivable. It measures the average number of days it takes for a company to collect revenue after a sale is made. A lower DSO indicates that the company is collecting payments from customers more quickly, which is typically seen as positive.
Looking at the DSO trend for Fabrinet over the past five years, we observe fluctuations in the DSO levels. In the most recent quarter, DSO stood at 75.01 days, indicating a slight improvement compared to the previous quarter at 76.51 days. However, it is important to note that DSO has generally been on an upward trend over the past few quarters, reaching as high as 78.47 days in December 2023.
On a year-over-year basis, DSO has shown variability, with some quarters showing improvements and others showing increases in the collection period. The DSO levels in the most recent quarter appear to be higher compared to the same quarter in the previous year, reflecting a potential challenge in collecting revenue efficiently.
Overall, a closer examination of the trend in DSO for Fabrinet suggests that the company may be facing challenges in managing its accounts receivable effectively. It would be beneficial for the company to focus on strategies to reduce DSO, such as improving collection practices and enhancing customer credit policies, to ensure a more efficient cash conversion cycle.
Peer comparison
Jun 30, 2024