ITT Inc (ITT)

Days of sales outstanding (DSO)

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Receivables turnover 5.16 4.86 4.75 4.98 4.88
DSO days 70.67 75.07 76.82 73.28 74.76

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.16
= 70.67

Firstly, it is important to note that days of sales outstanding (DSO) is a crucial metric that indicates the average number of days it takes for a company to collect payments from its customers. Lower DSO values are generally preferred as they signify a faster cash conversion cycle.

In the case of ITT Inc, the trend in DSO from 2020 to 2024 shows some fluctuations. In 2020, the DSO was 74.76 days, which decreased slightly to 73.28 days in 2021. However, the DSO then increased to 76.82 days in 2022 before decreasing to 75.07 days in 2023. Most recently, in 2024, the DSO improved to 70.67 days, possibly indicating more efficient collection processes or improved credit management.

Overall, the trend in DSO for ITT Inc exhibits some variability, which may warrant further investigation into the company's credit and collection policies. A lower DSO in 2024 compared to 2020 suggests potential improvements in managing accounts receivable and cash flow. However, continual monitoring of this metric is essential to ensure a healthy financial position and efficient working capital management.