Freshpet Inc (FRPT)

Days of sales outstanding (DSO)

Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 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
Receivables turnover 16.19 14.25 14.27 12.84 12.02 13.51 13.18 12.87 12.74 10.34 11.31 8.08 7.55 12.23 12.23 10.92 11.87 17.29 13.86 12.41
DSO days 22.54 25.61 25.57 28.43 30.37 27.01 27.69 28.35 28.65 35.30 32.28 45.18 48.32 29.84 29.83 33.44 30.75 21.11 26.33 29.41

March 31, 2025 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 16.19
= 22.54

The analysis of Freshpet Inc's days of sales outstanding (DSO) over the period from June 30, 2020, through March 31, 2025, reveals significant fluctuations indicative of evolving credit and collection policies as well as operational efficiencies.

Initially, the DSO decreased from approximately 29.41 days on June 30, 2020, to a low of around 21.11 days by December 31, 2020, suggesting improvements in receivables collection and potentially more effective credit management. This downward trend persisted into the early part of 2021, with the DSO averaging around 26-30 days, maintaining a relatively stable collection period.

However, starting in March 2021, a notable increase was observed, with the DSO ascending to approximately 33.44 days by June 30, 2021, and further rising to a peak of 48.32 days on March 31, 2022. This escalation indicates a deterioration in receivables turnover, possibly due to extended credit terms, delays in collections, or shifts in customer payment behaviors. The elevated DSO persisted into late 2022, with values exceeding 32 days, hinting at continued challenges in receivable management or customer credit policies.

Subsequent data from late 2022 through 2024 demonstrates a gradual reduction in DSO, reaching as low as approximately 25-27 days by September 2023, which suggests an improvement in collection efficiency. By March 2025, the DSO further declined to about 22.54 days, approaching pre-pandemic levels and indicating a potential stabilization or enhancement in receivables management practices.

Overall, the trend illustrates periods of both tightening and loosening in collection periods, reflecting operational adjustments, customer credit risk management, or strategic changes in credit terms. The recent decline towards a more consistent and shorter DSO period may signify effective remedial actions to improve receivables turnover and cash flow management.