Lear Corporation (LEA)

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		12.72	11.04	10.34	—	12.30	—	—	—	12.87	—	—	—	—	—	—	—	—	—	—	—
DSO	days	28.68	33.07	35.30	—	29.68	—	—	—	28.37	—	—	—	—	—	—	—	—	—	—	—

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 12.72
= 28.68

To analyze Lear Corp.'s Days Sales Outstanding (DSO) trend, we look at the historical data from Q1 2022 to Q4 2023. DSO represents the average number of days it takes for a company to collect payments after making a sale. A lower DSO indicates that the company is efficiently collecting payments from its customers.

From the data provided, we observe that Lear Corp.'s DSO fluctuated over the past eight quarters. In Q1 2022, the DSO was 61.79 days and increased to 70.24 days by Q1 2023, before declining to 57.26 days in Q4 2023.

The increase in DSO from Q1 2022 to Q1 2023 may suggest that Lear Corp. faced challenges in collecting payments from customers during this period, potentially indicating issues with billing, credit policies, or customer payment delays. However, the decrease in DSO from Q1 2023 to Q4 2023 is a positive trend, as it shows that the company has improved its collection efficiency in the most recent quarter.

Overall, while fluctuations in DSO are common in the industry, management should monitor DSO closely to ensure that payment collection processes are efficient and effective in maintaining healthy cash flows.