Kodiak Gas Services, Inc. (KGS)

Days of sales outstanding (DSO)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Receivables turnover		4.44	6.51	7.00	7.51	8.16
DSO	days	82.24	56.06	52.13	48.61	44.75

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.44
= 82.24

The analysis of Kodiak Gas Services, Inc.'s days of sales outstanding (DSO) over the period from December 31, 2020, to December 31, 2024, reveals a consistent upward trend. At the end of 2020, the DSO was approximately 44.75 days, indicating the company typically collected receivables within this period. By the close of 2021, the DSO had increased slightly to 48.61 days, reflecting a modest extension in the collection cycle. This upward movement continued into 2022, reaching 52.13 days, which suggests a gradual elongation of the receivables collection period.

The trend persisted into 2023, with DSO rising further to 56.06 days. This indicates that the company's collection period was extending, potentially impacting cash flow management. The most significant increase occurred by the end of 2024, with the DSO reaching 82.24 days. This sharp escalation signifies a substantial slowdown in the company's ability to convert receivables into cash, nearly doubling the collection period observed at the start of the analyzed timeframe.

Overall, the progressive increase in DSO over these years may point to a worsening trend in receivables management, changing credit policies, or industry-specific factors affecting collection efficiency. The substantial rise in DSO by 2024 warrants further investigation into potential causes such as customer credit risk, billing practices, or changes in business operations that might be influencing the company's receivables turnover.