Monolithic Power Systems Inc (MPWR)

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		9.49	12.38	12.00	9.40	7.92	9.64	10.64	9.94	9.37	10.37	11.30	10.48	10.96	13.15	12.90	10.83	12.28	8.09	11.86	11.30
DSO	days	38.45	29.48	30.42	38.82	46.07	37.86	34.30	36.71	38.95	35.19	32.29	34.81	33.31	27.75	28.29	33.71	29.72	45.09	30.78	32.30

December 31, 2024 calculation

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

Based on the provided data, Monolithic Power Systems Inc has displayed fluctuations in its Days Sales Outstanding (DSO) over the period from March 31, 2020, to December 31, 2024. DSO represents the average number of days it takes for a company to collect payments after making a sale.

The DSO trend indicates how efficiently a company manages its account receivables. A lower DSO value is generally preferred, as it signifies that the company is collecting payments from customers quicker. On the other hand, a higher DSO value may indicate potential issues with collecting payments promptly.

Monolithic Power Systems Inc's DSO ranged from a low of 27.75 days on September 30, 2021, to a high of 46.07 days on December 31, 2023. The company experienced a general downward trend in DSO from the end of 2023 to mid-2024, where it decreased to around 29-30 days. However, there was an uptick in DSO towards the end of 2024, with a value of 38.45 days on December 31, 2024.

Analyzing the DSO trend can provide insights into Monolithic Power Systems Inc's credit and collection policies, as well as the effectiveness of its customer payment processes. Further investigation into the reasons behind the fluctuations in DSO at specific points in time could reveal areas for improvement in managing account receivables and optimizing cash flow.