International Business Machines (IBM)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 8.01 | 4.26 | 3.83 | 2.94 | 2.43 | |
| DSO | days | 45.58 | 85.68 | 95.32 | 123.95 | 150.49 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 8.01
= 45.58
The days of sales outstanding (DSO) ratio for International Business Machines Corp. has shown a decreasing trend over the past five years. In particular, the DSO was 46.34 days as of December 31, 2023, down from 44.37 days in the previous year and significantly lower than the DSO of 92.90 days and 112.58 days in 2020 and 2019, respectively.
A lower DSO indicates that the company is collecting its accounts receivable more efficiently, which can lead to improved cash flow and working capital management. This trend suggests that IBM has been more effective in converting its sales into cash, potentially due to better credit policies, streamlined collection processes, or a focus on higher-quality customers.
However, it's essential to continue monitoring the DSO ratio to ensure that the improvement is sustainable and not a one-time occurrence. Evaluating changes in industry norms and comparing IBM's DSO to that of its competitors can provide further insights into the company's receivables management efficiency.
Peer comparison
Dec 31, 2023
See also:
International Business Machines Average Receivable Collection Period