Hershey Co (HSY)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 13.30 | 14.51 | 13.30 | 13.25 | 14.05 | |
| DSO | days | 27.44 | 25.16 | 27.43 | 27.55 | 25.98 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 13.30
= 27.44
Days of Sales Outstanding (DSO) is a metric used to measure the average number of days it takes for a company to collect payment after a sale has been made. A lower DSO indicates that the company is able to collect payments from customers more quickly, which is generally favorable as it improves cash flow.
Based on the data provided, Hershey Company's DSO has shown some fluctuations over the past five years. In 2023, the DSO increased to 26.93 days from 24.91 days in 2022, which indicates that Hershey took slightly longer to collect payments from customers in 2023 compared to the previous year.
Comparing the DSO figures over the past five years, Hershey's DSO has generally been in the range of 24.91 to 27.55 days. This suggests that the company has been able to maintain a relatively stable collection period over the years.
It is important for Hershey Company to monitor its DSO closely to ensure efficient management of accounts receivable. A rising DSO could indicate potential issues with credit policies or difficulties in collecting payments from customers, while a decreasing DSO may suggest improved efficiency in accounts receivable management. Further analysis of the trend in DSO in conjunction with other financial metrics would provide a more comprehensive understanding of Hershey's performance in managing its accounts receivable.
Peer comparison
Dec 31, 2023