Humana Inc (HUM)

Days of sales outstanding (DSO)

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Receivables turnover		52.27	56.11	69.09	30.78	55.48	56.86	26.53	27.21	45.79	43.15	33.00	35.92	67.80	65.54	31.53	33.71	61.45	74.01	67.17	30.05
DSO	days	6.98	6.50	5.28	11.86	6.58	6.42	13.76	13.41	7.97	8.46	11.06	10.16	5.38	5.57	11.58	10.83	5.94	4.93	5.43	12.15

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 52.27
= 6.98

To analyze Humana Inc.'s Days Sales Outstanding (DSO) over the past 8 quarters, we observe fluctuations in the collection period for accounts receivable. In Q1 2023, the DSO was notably higher at 11.86 days, indicating a slower collections process compared to the previous quarters. This could suggest potential challenges in efficiently converting credit sales into cash during that period.

However, in Q2 and Q3 2023, the DSO decreased to 5.28 days and 6.50 days, respectively, reflecting an improvement in the accounts receivable turnover and a more prompt collection of sales revenues.

Looking at Q4 2023, the DSO slightly increased to 6.98 days, but remained within a reasonable range. It could be an indication of maintaining a relatively stable collections process during that quarter.

Comparing to the same quarter in the previous year, Q4 2022 showed a DSO of 6.58 days, indicating consistency in managing accounts receivable turnover year-over-year.

Moreover, the significant increase in DSO observed in Q2 and Q3 2022 (13.76 days and 13.41 days, respectively) might have been impacted by factors like changes in credit policies or delays in collecting receivables during that period.

Overall, by monitoring the DSO trend, stakeholders can assess Humana Inc.'s efficiency in collecting outstanding receivables and manage potential liquidity risks associated with prolonged collection periods. A lower DSO typically signifies a more effective credit and collections process, whereas a higher DSO may indicate inefficiencies that require attention and optimization strategies.