Liquidity Services Inc (LQDT)

Days of sales outstanding (DSO)

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Receivables turnover		32.02	40.46	23.78	43.99	38.92
DSO	days	11.40	9.02	15.35	8.30	9.38

September 30, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 32.02
= 11.40

The Days of Sales Outstanding (DSO) ratio measures the average number of days it takes for a company to collect payment after making a sale. A lower DSO is generally favorable as it indicates efficient collection of accounts receivable, while a higher DSO may suggest delays in receiving payments.

Analyzing the DSO trend for Liquidity Services Inc over the past five years, we observe fluctuations in the collection efficiency:

1. In 2024, the DSO stands at 11.40 days, indicating a slight increase from the previous year. This might suggest a slight delay in the collection of accounts receivable compared to the prior year.

2. In 2023, the DSO was 9.02 days, which was a decrease from the prior year. This improvement suggests that the company was able to collect payments more efficiently in 2023.

3. In 2022, the DSO increased to 15.35 days from 8.30 days in 2021, indicating a significant delay in collecting payments. This substantial increase may raise concerns about the company's accounts receivable management or customer creditworthiness.

4. In 2021, the DSO was at a low of 8.30 days, suggesting efficient collections. This improvement from the previous year's DSO indicates effective accounts receivable management in 2021.

5. In 2020, the DSO was 9.38 days, showing a slight increase compared to the previous year. This could indicate a minor delay in collecting payments in 2020.

Overall, the trend analysis of Liquidity Services Inc's DSO reveals fluctuations in the efficiency of accounts receivable collections over the past five years. It is essential for the company to closely monitor and manage its collections process to ensure timely receipt of payments and maintain healthy cash flow levels.