Home Depot Inc (HD)

Days of sales outstanding (DSO)

		Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020
Receivables turnover		45.87	47.45	44.12	44.15	52.34
DSO	days	7.96	7.69	8.27	8.27	6.97

January 28, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 45.87
= 7.96

The Days of Sales Outstanding (DSO) ratio for Home Depot Inc has shown some fluctuations over the past five years. The trend indicates that the company takes, on average, around 8 days to collect its accounts receivable. In recent years, there has been a slight increase in DSO, with the ratio ranging from 6.97 days in 2020 to 8.27 days in 2022 and 2021.

A higher DSO may indicate that Home Depot is taking longer to collect payments from its customers, which could potentially affect its cash flow and working capital management. It is important for the company to monitor and manage its DSO effectively to ensure timely collections, reduce bad debt risks, and improve overall liquidity.

Overall, while the DSO ratio of Home Depot Inc has fluctuated slightly over the years, it is essential for the company to analyze the underlying reasons for these changes and implement strategies to optimize its accounts receivable management for better financial performance.