Ingersoll Rand Inc (IR)

Days of sales outstanding (DSO)

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Receivables turnover 5.42 5.57 5.27 5.43 4.11
DSO days 67.37 65.51 69.22 67.20 88.80

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.42
= 67.37

The Days Sales Outstanding (DSO) ratio measures the average number of days it takes for a company to collect revenue after a sale is made. In the case of Ingersoll Rand Inc, the trend in DSO over the past five years demonstrates a positive characteristic.

As of December 31, 2020, Ingersoll Rand had a DSO of 88.80 days, which signifies that it took the company nearly 89 days on average to collect its sales revenue. Subsequently, the company showed an improvement in its collection efficiency as reflected in the decrease in DSO to 67.20 days as of December 31, 2021.

Continuing the positive trend, Ingersoll Rand further reduced its DSO to 69.22 days by December 31, 2022, and then to 65.51 days by December 31, 2023, reflecting a consistent improvement in its ability to collect receivables in a timely manner.

By the end of December 31, 2024, the DSO slightly increased to 67.37 days compared to the previous year but remained relatively low, indicating that Ingersoll Rand continued to manage its accounts receivable efficiently.

Overall, the downward trend in DSO over the five-year period suggests that Ingersoll Rand has been effective in optimizing its credit and collection processes, translating into a more efficient management of its receivables.