Greenbrier Companies Inc (GBX)
Days of sales outstanding (DSO)
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 78.60 | 93.46 | 74.82 | 15.59 | 306.53 | |
| DSO | days | 4.64 | 3.91 | 4.88 | 23.42 | 1.19 |
August 31, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 78.60
= 4.64
The Days of Sales Outstanding (DSO) ratio measures how long it takes for a company to collect its accounts receivable. A lower DSO indicates faster collection of cash from customers, which is generally preferable as it can improve cash flow and liquidity.
Analyzing the DSO trend for Greenbrier Companies Inc over the past five years, we observe fluctuations in the metric. In 2020, the DSO was exceptionally low at 1.19 days, suggesting a swift collection of receivables. However, in 2021, there was a significant increase to 23.42 days, indicating a slower collection period, which could potentially raise concerns about the company's credit policies or the efficiency of its accounts receivable management.
In 2022 and 2024, the DSO decreased to 4.88 days and 4.64 days, respectively, showing an improvement in collecting receivables compared to the spike observed in 2021. It is worth noting that the DSO decreased further in 2023 to 3.91 days, indicating an even more efficient collection process than the previous year.
Overall, a lower DSO is generally viewed as positive, as it implies better working capital management and quicker conversion of sales into cash. The fluctuations in Greenbrier Companies Inc's DSO over the five years may have been influenced by various factors, such as changes in sales terms, customer payment behavior, or the effectiveness of the company's credit and collection processes. Monitoring DSO trends can provide valuable insights into a company's liquidity and financial performance.
Peer comparison
Aug 31, 2024