Hormel Foods Corporation (HRL)
Days of sales outstanding (DSO)
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 13.73 | 14.60 | 14.16 | 12.54 | 12.89 | |
| DSO | days | 26.59 | 25.01 | 25.77 | 29.10 | 28.32 |
October 27, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 13.73
= 26.59
To analyze Hormel Foods Corporation's Days of Sales Outstanding (DSO) over the 5-year period from October 2020 to October 2024, we observe the trend in the DSO metric. DSO measures the average number of days it takes the company to collect revenue after making a sale.
From the data provided, we can see that the DSO fluctuated over the period:
- In October 2020, the DSO was 28.32 days.
- In October 2021, the DSO increased to 29.10 days.
- In October 2022, the DSO decreased to 25.77 days.
- In October 2023, the DSO further decreased to 25.01 days.
- In October 2024, the DSO slightly increased to 26.59 days.
Overall, there was a general improvement in DSO performance from 2020 to 2023 as the metric decreased, indicating that Hormel Foods was able to collect sales revenue more quickly. However, there was a slight increase in DSO in 2024, suggesting a potential slowdown in the collection of receivables.
It is essential for the company to closely monitor its DSO to ensure efficient cash flow management and timely collection of accounts receivables. Further analysis of the reasons behind the fluctuations in DSO, such as changes in credit policies, customer payment behavior, or industry trends, would provide valuable insights into the company's financial performance and operations.