Monster Beverage Corp (MNST)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		5.93	6.17	6.18	6.89	7.77
DSO	days	61.56	59.13	59.05	52.99	46.99

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.93
= 61.56

Days of sales outstanding (DSO) is a vital metric for assessing how long it takes for Monster Beverage Corp. to collect its accounts receivable. The trend in DSO over the last five years indicates the effectiveness of the company in managing its credit and collection policies.

From 2019 to 2023, Monster Beverage Corp.'s DSO has shown a consistent increase, signaling a potential deterioration in the company's accounts receivable collection efficiency. The DSO rose from 46.95 days in 2019 to 61.04 days in 2023. This extended DSO suggests that the company is taking longer to convert its credit sales into cash, which could impact its liquidity and cash flow.

The upward trend in DSO could be a red flag, indicating possible issues with the company's credit policies, customer payment behavior, or internal collection processes. Management may need to review and streamline its accounts receivable management practices to improve cash flow and overall financial performance.

Overall, the increase in DSO for Monster Beverage Corp. over the past five years warrants further investigation and action to address any underlying issues affecting the company's accounts receivable turnover and liquidity position.