Generac Holdings Inc (GNRC)
Days of sales outstanding (DSO)
| 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 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Receivables turnover | 7.35 | 6.68 | 7.33 | 8.70 | 8.66 | 8.37 | 6.36 | 6.62 | 6.79 | 6.67 | 6.58 | 6.51 | 6.56 | 5.75 | 6.77 | 6.99 | 6.80 | 5.74 | 6.16 | 7.22 | |
| DSO | days | 49.65 | 54.65 | 49.78 | 41.97 | 42.14 | 43.58 | 57.36 | 55.11 | 53.72 | 54.71 | 55.45 | 56.03 | 55.62 | 63.48 | 53.89 | 52.25 | 53.68 | 63.56 | 59.23 | 50.53 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 7.35
= 49.65
To analyze Generac Holdings Inc's Days Sales Outstanding (DSO) based on the provided data:
1. Trend Analysis:
- The DSO has shown some fluctuations over the recent quarters, with Q3 2023 and Q2 2023 showing higher DSO figures compared to the previous quarters. This may indicate potential issues with accounts receivable management in those periods.
2. Seasonal Variations:
- There seems to be some seasonality in the DSO figures, with Q2 typically exhibiting higher DSO compared to other quarters. This could be attributed to factors like sales patterns, industry trends, or customer payment behaviors.
3. Comparison to Industry Benchmarks:
- It would be useful to benchmark Generac's DSO against industry averages to assess its efficiency in collecting receivables. A higher DSO than the industry norm may suggest that Generac is taking longer to convert sales into cash, possibly affecting its liquidity.
4. Impact on Cash Flow:
- A high DSO can tie up working capital and impact cash flow, as delayed collections inhibit the company's ability to reinvest in operations or fund strategic initiatives. Monitoring and managing DSO effectively is crucial for maintaining healthy cash flow.
5. Potential Improvement Strategies:
- Generac may consider implementing strategies to shorten its DSO, such as offering discounts for early payments, improving credit policies, enhancing collection procedures, or conducting regular reviews of aging accounts receivable to identify and address overdue payments promptly.
Overall, while fluctuations in DSO are common, it is essential for Generac Holdings Inc to closely monitor and manage its DSO trend to ensure efficient receivables management and healthy cash flow levels.
Peer comparison
Dec 31, 2023
See also:
Generac Holdings Inc Average Receivable Collection Period (Quarterly Data)