Lithia Motors Inc (LAD)

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		27.47	30.20	33.01	33.62	34.54	27.30	26.90	27.16	24.98	25.08	22.31	19.71	21.29	24.14	27.07	42.13	25.00	26.92	24.81	24.46
DSO	days	13.29	12.09	11.06	10.86	10.57	13.37	13.57	13.44	14.61	14.56	16.36	18.52	17.15	15.12	13.48	8.66	14.60	13.56	14.71	14.92

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 27.47
= 13.29

The Days of Sales Outstanding (DSO) for Lithia Motors, Inc. has shown a generally decreasing trend over the past 8 quarters, which indicates a more efficient collection of accounts receivable. In Q1 2022, the DSO was at 13.38 days and gradually decreased to 10.81 days in Q1 2023. This reduction suggests that the company is collecting its sales revenue quicker, which is a positive indicator of effective receivables management.

Overall, the company has been able to improve its DSO metric consistently, reflecting a more streamlined and effective credit and collection process. This trend can positively impact the company's cash flow and working capital management by accelerating the conversion of sales into cash. Continued monitoring of DSO will be essential to ensure this trend persists, indicating ongoing efficiency in accounts receivable management.