Granite Construction Incorporated (GVA)

Days of Sales Outstanding (DSO) is a key metric used to evaluate how efficiently a company manages its accounts receivable. It indicates the average number of days it takes for a company to collect revenue after making a sale. A lower DSO is generally favorable as it signifies faster collection of cash from customers.

Analyzing Granite Construction Inc.'s DSO over the past five years, we observe fluctuations in the metric:
- In 2023, the DSO increased to 62.27 days from 51.30 days in 2022, indicating a deterioration in the company's accounts receivable collection efficiency.
- The DSO in 2021 was 56.34 days, slightly higher than in 2020 (55.41 days), which suggests a moderate increase in the collection period.
- However, there was an improvement in 2020 compared to 2019, with the DSO decreasing from 57.99 days to 55.41 days.

The increase in DSO in 2023 could be a red flag, possibly indicating challenges in collecting receivables promptly. This trend warrants further investigation into the company's credit policies, customer payment behaviors, and overall receivables management practices. Monitoring DSO over time can provide insights into the company's financial health and operational efficiency in managing working capital.

Peer comparison

Dec 31, 2023