Eli Lilly and Company (LLY)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 3.01 | 4.14 | 4.24 | 4.18 | 4.91 | |
| DSO | days | 121.25 | 88.19 | 86.01 | 87.39 | 74.36 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 3.01
= 121.25
Lilly(Eli) & Co's Days Sales Outstanding (DSO) has shown a fluctuating trend over the past five years. In 2019, the DSO was 90.62 days, indicating that on average, it took approximately 90 days for the company to collect its accounts receivable.
Since then, the DSO has increased steadily each year, reaching its peak at 121.25 days by the end of 2023. This suggests that in 2023, it took the company on average about 121 days to collect its accounts receivable, reflecting a potential challenge in managing working capital efficiency.
The upward trend in DSO may indicate potential issues with the company's credit policies, collection procedures, or the creditworthiness of its customers. A higher DSO could lead to cash flow constraints and impact the company's liquidity position.
It would be beneficial for Lilly(Eli) & Co to assess the effectiveness of its accounts receivable management and take steps to improve collection processes to reduce DSO and enhance cash flow management.
Peer comparison
Dec 31, 2023