McDonald’s Corporation (MCD)

Days of sales outstanding (DSO)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Receivables turnover		10.88	10.25	10.96	12.40	9.10
DSO	days	33.56	35.62	33.30	29.43	40.10

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 10.88
= 33.56

To analyze McDonald's Corporation days of sales outstanding (DSO):

1. The DSO, also known as the average collection period, measures how long it takes for McDonald's to collect payments from its customers after making sales.

2. On December 31, 2020, McDonald's DSO was 40.10 days, indicating that on average, it took the company around 40 days to collect payments.

3. By December 31, 2021, McDonald's DSO decreased to 29.43 days, which suggests an improvement in the collection process, with the company now collecting payments faster.

4. However, by December 31, 2022, the DSO increased slightly to 33.30 days, showing that McDonald's took slightly longer to collect payments compared to the previous year.

5. Subsequently, on December 31, 2023, the DSO further increased to 35.62 days, indicating a continuing trend of slower collection of payments.

6. By December 31, 2024, the DSO decreased to 33.56 days, but it remained higher than in 2021, indicating that McDonald's still faced challenges in accelerating its collection efforts.

In conclusion, McDonald's Corporation experienced fluctuations in its DSO over the years, experiencing improvements in collection times in some years but facing challenges in others. Monitoring DSO trends is essential for the company to manage its cash flow effectively and ensure timely collections from customers.