Helmerich and Payne Inc (HP)

To analyze Helmerich & Payne, Inc.'s days of sales outstanding (DSO), we compare the DSO over the past five years. DSO measures the average number of days it takes for a company to collect payment after making a sale. A higher DSO may indicate a longer time for the company to collect its receivables, potentially signaling liquidity or credit management issues. Conversely, a lower DSO suggests a faster collection of receivables, indicating effective credit and collection policies.

Looking at the trend, we see that in 2023, the DSO decreased to 51.36 days from 81.32 days in 2022. This improvement indicates a more efficient collection process, potentially resulting from better credit management or customer payment behaviors. However, caution is warranted as this significant change in DSO from the previous year may carry implications for revenue recognition or changes in credit terms.

Comparing to prior years, the DSO was considerably higher in 2022 and 2019, at 81.32 days and 64.64 days respectively, reflecting potentially slower collection of receivables. In 2020, there was a notable decrease in DSO to 39.63 days, suggesting an exceptionally efficient collection period. It's important to investigate the factors contributing to these fluctuations, such as changes in customer payment patterns, credit policies, or economic conditions.

Overall, the declining trend in DSO from 2022 to 2023 is a positive indication of improved receivables management and potential increased liquidity. However, it warrants further analysis to understand the underlying reasons for this change and assess its sustainability in the long term.

Peer comparison

Sep 30, 2023