McKesson Corporation (MCK)
Days of sales outstanding (DSO)
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Receivables turnover | 14.28 | 13.06 | 12.93 | 12.98 | 14.25 | 13.34 | 13.53 | 13.47 | 14.19 | 13.99 | 12.45 | 12.14 | 12.42 | 12.59 | 12.14 | 13.00 | 11.58 | 11.95 | 11.69 | 11.27 | |
| DSO | days | 25.56 | 27.96 | 28.24 | 28.11 | 25.62 | 27.37 | 26.98 | 27.09 | 25.72 | 26.10 | 29.32 | 30.06 | 29.39 | 29.00 | 30.06 | 28.07 | 31.51 | 30.55 | 31.21 | 32.37 |
March 31, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 14.28
= 25.56
The Days Sales Outstanding (DSO) is a useful metric that indicates the average number of days it takes for a company to collect payment after making a sale. A lower DSO suggests that the company is collecting payments more quickly, which is generally favorable as it improves cash flow and liquidity.
Analyzing McKesson Corporation's DSO over the past few quarters, we observe some fluctuations. The DSO was 25.56 days as of March 31, 2024, which was lower compared to the previous quarter at 27.96 days. This decrease indicates that McKesson may have improved its accounts receivable collection efficiency during this period.
Looking further back, we can see that the DSO has generally remained within a range of 25 to 30 days over the past few quarters, with some slight variations. It is important to note that a consistent DSO within a certain range may suggest that McKesson has stable and effective credit and collection policies in place to manage its receivables.
However, it is also worth mentioning the increasing trend in DSO observed towards the end of 2021 and the beginning of 2022, where it reached around 31 to 32 days. This may indicate potential challenges in collecting payments promptly during that period, which could impact cash flow and working capital management.
Overall, while McKesson Corporation's DSO has seen fluctuations, it is crucial for the company to continue monitoring and managing its receivables effectively to ensure efficient cash flow operations and maintain financial stability.
Peer comparison
Mar 31, 2024
See also:
McKesson Corporation Average Receivable Collection Period (Quarterly Data)