MP Materials Corp (MP)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Receivables turnover | 8.43 | 14.87 | 6.51 | 37.42 | |
| DSO | days | 43.28 | 24.54 | 56.09 | 9.75 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 8.43
= 43.28
To analyze MP Materials Corporation's Days of Sales Outstanding (DSO) over the past four years, we observe a varying trend. In 2020, the DSO was at its lowest at 9.75 days, indicating that the company was efficient in collecting its Accounts Receivable. However, in 2021, there was a significant increase in DSO to 56.09 days, suggesting a delay in collecting payments from customers.
The trend reversed in 2022, with the DSO decreasing to 24.26 days compared to the previous year, but was still higher than in 2020. This improvement indicates a better management of Accounts Receivable during that period. In 2023, the DSO decreased further to 14.44 days, reflecting an enhanced efficiency in collecting revenues from sales.
Overall, by monitoring the DSO over the years, we can see fluctuations in MP Materials Corporation's ability to collect receivables promptly. A lower DSO indicates a faster collection process, which can improve cash flow and liquidity, while a higher DSO may suggest inefficiencies in credit and collection policies that could impact working capital management.
Peer comparison
Dec 31, 2023