Graham Holdings Co (GHC)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		8.74	7.15	5.13	5.60	4.84
DSO	days	41.78	51.06	71.12	65.21	75.44

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 8.74
= 41.78

Days Sales Outstanding (DSO) is a key metric 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 a faster collection of receivables, which can be a positive sign of strong cash flow management.

Analyzing the DSO trend for Graham Holdings Co. over the past five years, we observe a general improvement in collection efficiency. The DSO decreased from 79.04 days in 2019 to 43.98 days in 2023, indicating a significant enhancement in accounts receivable management. This reduction suggests that the company has been able to collect revenue more quickly in recent years.

The decrease in DSO could be attributed to various factors such as more effective credit policies, streamlined billing and collection processes, improved customer creditworthiness assessment, and enhanced customer relationship management practices. This improvement in DSO reflects positively on the company's cash flow and liquidity position.

Overall, the declining trend in DSO for Graham Holdings Co. signals efficient management of accounts receivable, which can contribute to improved financial performance and sustainability in the long run. However, it is important for the company to continue monitoring and managing its DSO to ensure continued efficiency in collections and cash flow management.