Inspire Medical Systems Inc (INSP)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		6.95	6.63	6.77	4.52	6.25
DSO	days	52.51	55.02	53.94	80.70	58.41

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.95
= 52.51

The days of sales outstanding (DSO) of Inspire Medical Systems Inc have fluctuated over the past five years. In 2023, the DSO decreased to 52.51 days from 55.02 days in 2022, indicating a more efficient collection of receivables. This reduction in DSO suggests that the company is collecting payments from customers more quickly, which can improve cash flow and liquidity.

Comparing 2023 to 2019, we observe a significant improvement in DSO, dropping from 58.41 days to 52.51 days. This trend indicates that the company has been successful in managing its accounts receivable, possibly through tighter credit policies or more effective collection practices.

However, the DSO spiked in 2020 to 80.70 days, which may have been due to various factors such as economic conditions or changes in customer payment behavior. It is commendable that the company was able to bring down the DSO to more normalized levels in the subsequent years.

Overall, the decreasing trend in DSO over the years reflects a positive aspect of Inspire Medical Systems Inc's ability to efficiently manage its accounts receivable, potentially leading to improved financial health and operational effectiveness.