IDEX Corporation (IEX)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 7.65 | 7.19 | 7.76 | 8.02 | 8.37 | |
| DSO | days | 47.69 | 50.79 | 47.05 | 45.49 | 43.63 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 7.65
= 47.69
The Days Sales Outstanding (DSO) is a measure that indicates the average number of days it takes for a company to collect revenue after a sale is made. A lower DSO is generally favorable as it implies faster collection of receivables, leading to improved liquidity and cash flow.
Observing Idex Corporation's DSO trend over the past five years, we note a slight increase in DSO from 43.63 days in 2019 to 47.69 days in 2023. This indicates that on average, it took Idex Corporation longer to collect its accounts receivable in 2023 compared to prior years.
Although an increasing DSO may suggest potential issues with managing accounts receivable and collecting payments from customers promptly, it is crucial to consider industry norms and specific business dynamics. It would be insightful to compare Idex Corporation's DSO with industry peers to assess its relative efficiency in receivables management.
Further analysis and investigation into the company's credit policies, customer payment behavior, and collection strategies would provide deeper insights into the factors driving the changes in DSO. Evaluating the efficiency of the company's working capital management and identifying areas for improvement in the collection process could help enhance overall financial performance and cash flow for Idex Corporation.
Peer comparison
Dec 31, 2023