McCormick & Company Incorporated (MKC)
Days of sales outstanding (DSO)
| Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Receivables turnover | 11.81 | 11.34 | 10.58 | 11.69 | 11.20 | 11.07 | 11.29 | 12.86 | 12.31 | 11.50 | 11.36 | 12.04 | 11.38 | 10.60 | 11.13 | 10.98 | 13.00 | 10.63 | 10.78 | 12.40 | |
| DSO | days | 30.92 | 32.19 | 34.51 | 31.21 | 32.60 | 32.97 | 32.34 | 28.39 | 29.66 | 31.75 | 32.13 | 30.31 | 32.07 | 34.44 | 32.78 | 33.24 | 28.08 | 34.33 | 33.87 | 29.44 |
February 29, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 11.81
= 30.92
Days of Sales Outstanding (DSO) is a financial ratio that measures the average number of days it takes for a company to collect payments from its customers after a sale has been made. A lower DSO indicates that a company is collecting payments more quickly, which is generally viewed favorably by investors and creditors.
Analyzing the trend in McCormick & Company Incorporated's DSO over the past few quarters, we observe fluctuations in the metric. In the most recent quarter ending on February 29, 2024, the DSO stood at 30.92 days, which was lower compared to the previous quarter at 32.19 days. This reduction suggests that the company has been able to improve its collection efficiency and is collecting payments from customers more promptly.
Looking at the historical data, we notice that McCormick's DSO has been somewhat volatile, ranging from a low of 28.08 days to a high of 34.51 days over the past few quarters. It is essential to monitor DSO trends over time to assess the effectiveness of the company's credit and collection policies.
Overall, the recent decrease in DSO for McCormick & Company Incorporated indicates a positive trend in cash flow management and efficient collection of accounts receivable, which may lead to improved liquidity and operational performance in the future.