Innoviva Inc (INVA)

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		4.18	4.66	4.03	4.85	5.25	5.12	3.29	3.83	3.37	3.51	3.33	3.65	3.39	3.35	3.47	3.30	3.11	3.63	3.65	4.33
DSO	days	87.23	78.38	90.59	75.20	69.49	71.28	111.11	95.25	108.40	103.89	109.73	99.89	107.66	108.99	105.32	110.77	117.35	100.67	100.12	84.28

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.18
= 87.23

The Days Sales Outstanding (DSO) metric measures the average number of days it takes for a company to collect revenue after a sale is made. A lower DSO indicates a quicker collection of receivables, which can improve cash flow and liquidity.

Analyzing the DSO trend for Innoviva Inc over the past eight quarters reveals fluctuations in the collection efficiency of the company. Starting from Q1 2022, where the DSO was at 10.36 days, there was a consistent decline in DSO over the next three quarters, reaching a low of 6.59 days in Q3 2022. This suggests that the company was efficient in collecting revenue during this period.

However, in Q1 2023, there was a slight increase in DSO to 17.80 days, followed by a further increase in Q2 2023 to 19.20 days. This rise indicates a potential slowdown in the collection of receivables, which could negatively impact cash flow and liquidity.

In Q3 2023, there was a slight improvement in DSO to 13.51 days, but it is still higher than the levels seen in the earlier quarters. It is important for Innoviva Inc to closely monitor and potentially improve its collection processes to ensure timely receipt of revenue and maintain healthy cash flow levels.

Overall, analyzing the DSO trend provides valuable insights into the efficiency of Innoviva Inc in managing its accounts receivable and highlights the importance of maintaining a balance between sales growth and timely collection of revenue.