Monolithic Power Systems Inc (MPWR)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		7.92	9.37	10.96	12.28	11.38
DSO	days	46.07	38.95	33.31	29.72	32.08

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 7.92
= 46.07

Monolithic Power System Inc's Days Sales Outstanding (DSO) measures the average number of days it takes for the company to collect payment after making a sale. Over the past five years, the trend in DSO for Monolithic Power System Inc has shown some variability.

In 2019, the DSO was 32.08 days, indicating that, on average, the company took about a month to collect payments. The DSO decreased to 29.72 days in 2020, suggesting an improvement in the company's collection efficiency as it took fewer days to collect payments.

However, in 2021, the DSO increased to 33.32 days, signifying a reversal in the collection efficiency compared to the previous year. This increase in DSO was further exacerbated in 2022 when it rose to 38.95 days, indicating that the company took almost 39 days on average to collect payments.

Fortunately, in 2023, there was a positive development as the DSO decreased to 36.05 days, although it remained higher than the levels seen in 2020 and 2019. This improvement suggests that Monolithic Power System Inc made progress in accelerating its payment collections compared to the previous year but still has room for further enhancement.

Overall, the analysis of Monolithic Power System Inc's DSO indicates a varied performance in collection efficiency over the past five years, with fluctuations that may warrant closer attention to manage working capital effectively.