Hubbell Inc (HUBB)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		6.79	6.60	6.10	7.46	6.65
DSO	days	53.75	55.30	59.82	48.95	54.87

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.79
= 53.75

Days Sales Outstanding (DSO) is a crucial metric that indicates the average number of days it takes for a company to collect payments from its customers after making a sale. A lower DSO value is favorable as it signifies quicker cash conversion and efficient accounts receivable management.

When analyzing Hubbell Inc.'s DSO over the past five years, we observe a fluctuating trend. In 2023, the DSO decreased to 53.35 days from 54.71 days in 2022, indicating improved efficiency in collecting payments from customers. This decrease may suggest more effective credit and collection policies or better customer relationships.

Comparing the DSO values from 2023 to those of earlier years, Hubbell Inc. has generally maintained a relatively stable range of DSO values around 53-58 days. The consistency in this range indicates a consistent approach to managing accounts receivable over the years.

It is worth noting that a DSO value below the industry average could suggest aggressive credit policies that may risk potential bad debts, while a DSO value significantly above the industry average may indicate ineffective credit control and collection practices.

Overall, Hubbell Inc.'s DSO trend reflects a reasonable balance between collection efficiency and maintaining good customer relations. Further monitoring of DSO in conjunction with other financial metrics would provide a more comprehensive assessment of the company's overall financial health and operational effectiveness.