Mister Car Wash Inc (MCW)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Receivables turnover | 40.53 | 43.69 | 28.99 | |
| DSO | days | 9.01 | 8.35 | 12.59 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 40.53
= 9.01
The Days Sales Outstanding (DSO) ratio for Mister Car Wash Inc has shown some fluctuations over the past three years. In 2021, the DSO was 11.50 days, indicating that, on average, it took the company 11.50 days to collect its accounts receivable. Over the following two years, the DSO decreased to 7.96 days in 2022 and then slightly increased to 8.28 days in 2023.
A lower DSO generally reflects a faster collection of receivables, which can be a positive sign of the company's efficiency in managing its accounts receivable. The improvement from 2021 to 2022 suggests that Mister Car Wash Inc was able to collect its receivables more quickly, enhancing its cash flows and potentially reducing its risk of bad debt.
However, the slight increase in DSO from 2022 to 2023 may indicate a potential slowdown in collecting receivables compared to the previous year. It is essential for the company to monitor this trend and investigate the reasons behind the increase in DSO to ensure its collections remain efficient.
Overall, while the downward trend in DSO from 2021 to 2022 is positive, Mister Car Wash Inc should focus on maintaining efficient accounts receivable management to continue improving its cash flow and financial performance.
Peer comparison
Dec 31, 2023