HP Inc (HPQ)
Days of sales outstanding (DSO)
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 9.62 | 49.54 | 8.09 | 7.58 | 7.36 | |
| DSO | days | 37.96 | 7.37 | 45.12 | 48.16 | 49.59 |
October 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 9.62
= 37.96
To analyze HP Inc's days of sales outstanding (DSO), we can observe a trend over the past five years. DSO measures the average number of days that a company takes to collect payment after a sale is made. A lower DSO indicates that the company is collecting payments more quickly, which is generally favorable.
From 2019 to 2023, HP Inc's DSO has exhibited a decreasing trend, falling from 55.53 days in 2019 to 43.74 days in 2023. This suggests an improvement in the company's ability to efficiently collect payments from customers, which can have a positive impact on cash flow and working capital management.
The decline in DSO reflects a potentially effective credit and collections process, leading to improved cash flow and liquidity for the company. It may also indicate enhanced customer credit policies, tighter credit controls, or a focus on managing accounts receivable more efficiently.
Overall, the decreasing trend in HP Inc's DSO over the last five years suggests an improvement in the company's management of accounts receivable and the collection of sales proceeds, which is a positive indicator of financial performance and effective working capital management.
Peer comparison
Oct 31, 2023