Hormel Foods Corporation (HRL)
Days of sales outstanding (DSO)
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 14.60 | 14.16 | 12.54 | 12.89 | 15.98 | |
| DSO | days | 25.01 | 25.77 | 29.10 | 28.32 | 22.84 |
October 29, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 14.60
= 25.01
The days of sales outstanding (DSO) for Hormel Foods Corp. have fluctuated over the past five years. In 2023, the DSO decreased to 24.85 days from 25.63 days in 2022, indicating that the company improved its efficiency in collecting receivables from customers. This decline suggests that the company's accounts receivable turnover has increased, a positive sign of the company's effectiveness in managing its credit sales.
Looking back further, in 2021, the DSO was 28.98 days, reflecting a longer period for the company to collect its sales proceeds. This could signal potential issues with credit management or customer payment behaviors during that period.
The DSO also decreased from 28.26 days in 2020 to 22.84 days in 2019, indicating an improvement in receivables collection efficiency during that time.
Overall, the trend in DSO reflects fluctuations in the efficiency of Hormel Foods Corp.'s accounts receivable management. The recent decline in DSO suggests an improvement in the company's ability to collect sales proceeds, which can positively impact its cash flow and overall financial performance.