Monolithic Power Systems Inc (MPWR)

Days of sales outstanding (DSO)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Receivables turnover		9.49	7.92	9.37	10.96	12.28
DSO	days	38.45	46.07	38.95	33.31	29.72

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 9.49
= 38.45

Based on the provided data, Monolithic Power Systems Inc's Days Sales Outstanding (DSO) has shown a consistent increasing trend over the years. In December 2020, the DSO was at 29.72 days, which increased to 33.31 days by December 2021. Subsequently, there was a further increase to 38.95 days by December 2022. The trend continued with DSO reaching 46.07 days by December 2023. However, there was a slight decrease in DSO to 38.45 days by December 2024.

The increasing trend in DSO indicates that the company is taking longer to convert its accounts receivable into cash, which could potentially signal challenges in collecting sales revenue efficiently. It could also suggest a need to assess and improve the company's credit policies, collections processes, or customer payment terms to optimize cash flow management and working capital efficiency.