Lam Research Corp (LRCX)

Days of sales outstanding (DSO)

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Receivables turnover		5.91	6.10	3.95	4.76	4.70
DSO	days	61.71	59.79	92.39	76.66	77.60

June 30, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.91
= 61.71

Lam Research Corp's Days Sales Outstanding (DSO) measures the average number of days it takes for the company to collect revenue after making a sale. A lower DSO indicates that the company is collecting its accounts receivable more quickly, which is generally seen as a positive sign of efficient cash flow management.

Analyzing the trend in DSO over the past five years, we observe fluctuations in the metric. In the most recent fiscal year ending June 30, 2024, the DSO stood at 61.71 days, showing a slight increase compared to the previous year's DSO of 59.79 days.

Examining further, we see a significant improvement in DSO from the high of 92.39 days in 2022 to 76.66 days in 2021. This indicates that the company managed to shorten the collection period during these years. However, comparing the latest DSO with the levels observed in 2020 (77.60 days), there seems to be a moderate improvement in the efficiency of receivables collection.

Overall, Lam Research Corp's recent DSO of 61.71 days suggests a reasonably efficient accounts receivable management strategy. However, continuous monitoring of this metric is essential to ensure timely collection of revenues and effective cash flow management.