International Paper (IP)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 6.11 | 12.81 | 12.08 | 13.36 | 13.50 | |
| DSO | days | 59.76 | 28.49 | 30.21 | 27.31 | 27.04 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.11
= 59.76
Days of Sales Outstanding (DSO) is a key financial ratio that measures the average number of days it takes for a company to collect its accounts receivable. A lower DSO indicates that the company is collecting payments more quickly, which is generally positive as it implies better cash flow management and lower credit risk.
Looking at the trend in International Paper Co.'s DSO over the past five years, we can observe some fluctuations. In 2023, the DSO increased to 59.03 days compared to 56.64 days in 2022. This may suggest that the company took slightly longer to collect its receivables in 2023, which could be a concern if this trend continues.
However, it is important to note that the DSO in 2023 is still lower than in 2021 and 2020, indicating that International Paper Co. has historically been efficient in collecting its accounts receivable. The DSO was particularly low in 2020 at 54.34 days, showing strong receivables management that year.
Overall, while the slight increase in DSO in 2023 may warrant monitoring, International Paper Co.'s historical performance in managing receivables has been relatively stable and efficient, reflecting sound credit and collection practices.
Peer comparison
Dec 31, 2023