McCormick & Company Incorporated (MKC)
Days of sales outstanding (DSO)
| Nov 30, 2023 | Nov 30, 2022 | Nov 30, 2021 | Nov 30, 2020 | Nov 30, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 11.34 | 11.07 | 11.50 | 10.60 | 10.63 | |
| DSO | days | 32.19 | 32.97 | 31.75 | 34.44 | 34.33 |
November 30, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 11.34
= 32.19
Based on the days sales outstanding (DSO) data provided for McCormick & Co., Inc., it can be observed that the company's DSO has shown a fluctuating trend over the past five years. The DSO represents the average number of days it takes for the company to collect its accounts receivable. A lower DSO is generally favorable as it indicates that the company is able to collect payments from its customers more quickly.
In 2023, the DSO decreased to 32.19 days from 32.97 days in 2022, which suggests an improvement in the company's accounts receivable collection efficiency. This reduction in DSO may indicate the company's effective credit and collection policies, timely invoicing, or potential changes in customer payment behavior.
Comparing the 2023 DSO to the data from previous years, it is evident that the company has made progress in managing its accounts receivable. However, it is important to note that the DSO is still subject to fluctuations, and it would be beneficial for the company to continue monitoring and evaluating its accounts receivable management practices to sustain improvements in this area.