Molina Healthcare Inc (MOH)

Days of sales outstanding (DSO)

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 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
Receivables turnover 12.32 12.03 11.58 10.70 10.98 13.52 13.68 12.76 13.89 14.04 13.51 13.46 12.76 13.39 12.70 12.05 11.62 10.40 11.19 10.77
DSO days 29.62 30.35 31.53 34.10 33.25 27.01 26.68 28.61 26.28 26.00 27.01 27.12 28.61 27.26 28.75 30.30 31.42 35.09 32.61 33.90

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 12.32
= 29.62

Days Sales Outstanding (DSO) is a key financial metric used to evaluate the efficiency of a company's accounts receivable management. It measures the average number of days it takes for a company to collect revenue after making a sale. Lower DSO values indicate favorable performance in collecting payments from customers in a timely manner.

Analyzing Molina Healthcare Inc's DSO over the given period, we observe fluctuations in the metric. The trend of DSO from March 31, 2020, to December 31, 2024, displays variations, with the metric fluctuating between 26.00 days to 35.09 days. Notably, the trend shows a general decline in DSO from the initial 33.90 days on March 31, 2020, to the lowest point of 26.00 days on September 30, 2022. This downward trend highlights the company's improvement in the collection of accounts receivable.

However, there are occasional increases in DSO, such as the uptick seen on December 31, 2023, to 33.25 days, before dropping again in subsequent periods. It is essential for Molina Healthcare Inc to closely monitor these fluctuations as prolonged increases in DSO can indicate potential issues in accounts receivable management or difficulties in collecting payments from customers.

Overall, the downward trend in DSO suggests that Molina Healthcare Inc has been effectively managing its accounts receivable and improving its collection processes. Maintaining a low DSO level is crucial for the company's financial health and operational efficiency in the long term.