Illumina Inc (ILMN)

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		6.14	6.47	6.02	—	6.83	—	—	—	6.98	—	—	—	—	—	—	—	—	—	—	—
DSO	days	59.48	56.41	60.63	—	53.44	—	—	—	52.26	—	—	—	—	—	—	—	—	—	—	—

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.14
= 59.48

Days Sales Outstanding (DSO) is a financial ratio that measures the average number of days a company takes to collect revenue after a sale has been made. A lower DSO indicates a faster collection of accounts receivable, which is positive for the company's cash flow and liquidity position.

Analyzing the DSO trend for Illumina Inc over the past eight quarters, we observe fluctuations in the metric. In Q4 2023, the DSO increased to 59.48 days compared to the previous quarter's 56.39 days, indicating a slight deterioration in the company's ability to collect receivables promptly.

Looking back further, we note that Illumina Inc's DSO has been generally increasing over the past two quarters, although it remains relatively consistent within a range of 48 to 60 days. This suggests that the company may be experiencing challenges in managing its accounts receivable efficiently, potentially impacting its cash conversion cycle.

It is essential for Illumina Inc to closely monitor its DSO trend and implement strategies to improve its receivables management process. A persistent increase in DSO could result in cash flow constraints and indicate potential credit risks associated with the company's customers. By enhancing collection efforts and maintaining a balance between sales growth and credit risk, Illumina Inc can optimize its working capital management and strengthen its financial position in the long run.