WW Grainger Inc (GWW)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 7.48 | 7.10 | 7.38 | 7.87 | 8.01 | |
| DSO | days | 48.82 | 51.43 | 49.49 | 46.39 | 45.57 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 7.48
= 48.82
W.W. Grainger Inc.'s Days Sales Outstanding (DSO) is a metric used to measure how efficiently the company is collecting its accounts receivable. A lower DSO indicates that the company is collecting payments from customers more quickly, which is generally favorable.
From 2019 to 2020, W.W. Grainger Inc.'s DSO decreased from 45.28 days to 45.61 days, suggesting a slightly slower collections process. However, from 2020 to 2021, there was a slight improvement as DSO decreased to 49.16 days. The trend continued positively in 2022 with a DSO of 51.13 days, showing a longer collection period compared to the previous year.
Notably, in 2023, W.W. Grainger Inc.'s DSO decreased significantly to 48.55 days, indicating a more efficient collection process compared to the prior year. This reduction of DSO suggests an improvement in the company's ability to convert sales into cash, leading to potentially healthier cash flows and liquidity.
Overall, while there have been fluctuations in W.W. Grainger Inc.'s DSO over the years, the recent decrease in the metric in 2023 is a positive sign of enhanced efficiency in accounts receivable management for the company.