Illinois Tool Works Inc (ITW)

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		5.06	5.01	4.92	4.93	4.96	5.09	4.82	4.68	5.02	5.17	4.97	4.78	4.96	4.98	5.84	5.62	5.66	5.62	5.41	5.35
DSO	days	72.13	72.90	74.14	73.99	73.62	71.68	75.74	77.92	72.77	70.65	73.44	76.30	73.65	73.33	62.53	64.93	64.44	64.92	67.41	68.28

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.06
= 72.13

Days of Sales Outstanding (DSO) is a key metric used to evaluate how efficiently a company manages its accounts receivable. It indicates the average number of days it takes for a company to collect payment from its customers after making a sale.

Analyzing the DSO trend for Illinois Tool Works, Inc. over the past eight quarters, we observe fluctuations in the metric. In Q4 2023, the DSO stood at 73.67 days, slightly higher than the previous quarter's 71.73 days. This suggests that the company took slightly longer to collect payments from customers in the latest quarter.

Comparing the most recent DSO with the same quarter in the previous year, we see a slight improvement from 74.98 days in Q4 2022 to 73.67 days in Q4 2023. Despite the quarterly variations, the DSO metric seems to be relatively stable over the past eight quarters, indicating consistent management of accounts receivable.

However, it is crucial for Illinois Tool Works to closely monitor and manage its DSO to ensure timely collection of payments and optimize cash flow. By maintaining an efficient account receivable process, the company can improve its liquidity position and overall financial health.