First Solar Inc (FSLR)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 2.47 | 8.08 | 6.81 | 9.26 | 4.63 | |
| DSO | days | 147.64 | 45.20 | 53.62 | 39.41 | 78.76 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 2.47
= 147.64
The days of sales outstanding (DSO) for First Solar Inc have shown significant fluctuations over the past five years. In 2023, the DSO increased to 152.42 days from 49.47 days in 2022, indicating a deterioration in the company's ability to collect payments from its customers. This substantial increase may raise concerns about the efficiency of First Solar's accounts receivable management.
Compared to 2021 and 2020 when the DSO was 56.77 days and 39.62 days respectively, the current figure of 152.42 days in 2023 reflects a significant deterioration in the collection process. It suggests that First Solar is taking a longer time to convert its credit sales into cash, potentially impacting its cash flow and liquidity position.
Additionally, the DSO in 2019 was 84.88 days, indicating that the company had faced a similar issue with delayed collections in the past. The recent spike in DSO to 152.42 days in 2023 may warrant further investigation into the company's credit policies, customer relationships, and collection processes to address the inefficiencies and improve cash flow management.
Overall, the trend in First Solar's DSO highlights the importance of closely monitoring accounts receivable turnover and collection practices to ensure timely cash inflows and maintain healthy working capital levels.
Peer comparison
Dec 31, 2023