Huntington Ingalls Industries Inc (HII)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 17.79 | 13.25 | 14.83 | 16.48 | 19.10 | |
| DSO | days | 20.52 | 27.56 | 24.60 | 22.15 | 19.11 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 17.79
= 20.52
Huntington Ingalls Industries Inc's Days of Sales Outstanding (DSO) measure indicates the average number of days it takes for the company to convert its accounts receivable into cash. A lower DSO value is generally favorable as it signifies a quicker collection of receivables and better cash flow management.
Analyzing the trend in Huntington Ingalls Industries Inc's DSO over the past five years reveals fluctuations in the company's efficiency in collecting payments from customers. The DSO decreased from 27.56 days in 2022 to 20.52 days in 2023, indicating an improvement in receivables management and faster conversion of sales into cash. This could suggest more effective credit control policies or prompt payment practices by customers.
Comparing the latest DSO with previous years, it appears that Huntington Ingalls Industries Inc's collection process has become more efficient over time. The company managed to significantly reduce its DSO from 2019 to 2023, reflecting improved working capital management and potentially tighter credit policies. This trend bodes well for the company's liquidity and financial health.
Overall, Huntington Ingalls Industries Inc's decreasing DSO trend indicates stronger cash flow generation capabilities and effective management of accounts receivable. It suggests that the company is enhancing its operational efficiency and maintaining a healthy balance between sales and cash collection activities.
Peer comparison
Dec 31, 2023