Landstar System Inc (LSTR)

Days of sales outstanding (DSO)

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Receivables turnover 7.05 7.13 7.68 5.66 5.41
DSO days 51.79 51.19 47.50 64.45 67.49

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 7.05
= 51.79

To analyze Landstar System Inc's days of sales outstanding (DSO) over the years, we observe a decreasing trend from 67.49 days as of December 31, 2020, to 51.79 days as of December 31, 2024. This indicates that the company has been collecting its accounts receivable more efficiently over time. A lower DSO typically signals better liquidity and working capital management, as it shows the average number of days it takes for the company to collect payments from its customers.

The reduction in DSO could be attributed to effective credit control measures, improved collection processes, or a shift towards customers with better payment terms. A declining DSO is generally viewed positively by investors and creditors, as it suggests a healthier cash flow position for the company.

However, it is important to note that while a decreasing DSO is favorable, an excessively low DSO may indicate overly aggressive collection practices that could potentially strain customer relationships. Therefore, it is essential for Landstar System Inc to strike a balance between efficient receivables management and maintaining good customer rapport.