L3Harris Technologies Inc (LHX)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Jun 30, 2019
Receivables turnover		2.40	2.83	2.98	13.33	14.51
DSO	days	152.35	128.80	122.59	27.39	25.15

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 2.40
= 152.35

The Days Sales Outstanding (DSO) for L3Harris Technologies Inc has shown an increasing trend over the past five years, indicating a lengthening of the average time it takes the company to collect its accounts receivable.

From June 30, 2019, to December 31, 2020, there was a significant increase in DSO from 25.15 days to 27.39 days. This might suggest a slight slowdown in the company's collection efforts and could potentially signal issues with credit management or customer payment delays during this period.

The DSO further increased to 122.59 days as of December 31, 2021, and climbed to 128.80 days by the end of December 31, 2022. These elevated levels indicate a substantial delay in converting sales into cash, which could lead to liquidity challenges and increased risk for the company in terms of working capital management.

As of December 31, 2023, the DSO reached 152.35 days, reflecting a continued deterioration in the efficiency of accounts receivable collection. A high DSO can strain cash flow and indicate potential difficulties in managing outstanding customer payments, potentially pointing to the need for a reassessment of credit policies or collection procedures to improve liquidity and reduce financial risk.