Gentex Corporation (GNTX)

Days of sales outstanding (DSO)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Receivables turnover		7.83	7.14	6.94	6.93	5.93
DSO	days	46.60	51.09	52.59	52.67	61.60

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 7.83
= 46.60

Gentex Corporation's Days Sales Outstanding (DSO) has shown a decreasing trend over the past five years. As of December 31, 2020, the DSO was 61.60 days, indicating the average number of days it took for the company to collect revenue from its sales. By December 31, 2024, the DSO had decreased to 46.60 days, reflecting an improvement in the company's collections efficiency.

A decreasing DSO is generally viewed positively as it suggests that the company is collecting payments from its customers more quickly, which can help improve cash flow and working capital management. It also indicates effective credit management and strong customer relationships.

However, it's important to note that a very low DSO could potentially indicate overly aggressive credit policies or difficulty in attracting new customers. Therefore, while a decreasing trend in DSO is favorable, it is essential for Gentex Corporation to strike a balance between efficient collections and maintaining healthy customer relationships.