Laboratory Corporation of America Holdings (LH)
Days of sales outstanding (DSO)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 6.72 | 6.38 | 5.36 | 7.17 | 5.64 | |
| DSO | days | 54.33 | 57.20 | 68.04 | 50.89 | 64.75 |
December 31, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.72
= 54.33
Laboratory Corporation of America Holdings had a varying trend in its days of sales outstanding (DSO) over the analyzed period. DSO decreased from 64.75 days as of December 31, 2020, to 50.89 days as of December 31, 2021, indicating the company was collecting its accounts receivable more efficiently in the following year. However, the DSO increased to 68.04 days by December 31, 2022, suggesting a potential slowdown in collections.
Subsequently, there was a decrease in DSO to 57.20 days by December 31, 2023, and further improvement to 54.33 days by December 31, 2024. These reductions indicate that Laboratory Corporation of America Holdings managed its receivables more effectively, leading to a faster turnover of its accounts receivable balances.
Overall, the trend in DSO indicates fluctuation in the speed of accounts receivable collections for Laboratory Corporation of America Holdings over the analyzed period, with some improvements in managing its credit sales and collections processes.
It is essential for the company to continue monitoring and managing its DSO to ensure efficient cash flow management and timely collection of outstanding amounts owed to maintain a healthy financial position.
Peer comparison
Dec 31, 2024