Hillenbrand Inc (HI)
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 | 4.60 | 4.29 | 4.45 | 3.99 | 4.03 | 4.41 | 3.67 | 4.08 | 4.74 | 5.03 | 6.71 | 6.14 | 5.67 | 6.03 | 4.98 | 4.47 | 3.57 | 4.54 | 5.03 | 4.93 | |
| DSO | days | 79.32 | 85.10 | 81.93 | 91.46 | 90.59 | 82.86 | 99.39 | 89.38 | 77.05 | 72.53 | 54.39 | 59.48 | 64.35 | 60.56 | 73.25 | 81.57 | 102.26 | 80.48 | 72.63 | 74.05 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.60
= 79.32
The Days of Sales Outstanding (DSO) ratio measures the average number of days it takes for a company to collect payment from its customers after making a sale. A lower DSO indicates that the company is collecting payments more quickly, which is advantageous for improving cash flow and liquidity.
Analyzing Hillenbrand Inc's DSO over the past eight quarters, we observe fluctuations in the metric. In Q1 2024, the DSO stands at 79.32 days, a slight decrease from the previous quarter's 85.10 days. This suggests that the company improved its collection efficiency in the most recent quarter. However, compared to Q1 2023 (75.96 days), the DSO has slightly increased.
Looking at the historical trend, we see that the DSO was relatively stable in Q3 and Q4 of 2022, at 62.17 days and 59.93 days, respectively. Subsequently, in Q1 and Q2 of 2023, the DSO increased to 75.96 days and 82.14 days, indicating a potential slowdown in collections during that period.
The DSO dropped significantly in Q3 2023 to 77.68 days, followed by a further decrease in Q4 2023 to 85.10 days. The sharp decrease in DSO from Q4 2022 to Q3 2023 suggests that the company enhanced its receivables management practices, leading to faster collection of payments.
Overall, it is essential for Hillenbrand Inc to consistently monitor and manage its DSO to ensure efficient cash flow management and timely collection of receivables. Additionally, the company should strive to strike a balance between accelerating collections and maintaining strong customer relationships to sustain its financial health in the long term.
Peer comparison
Dec 31, 2023