Merck & Company Inc (MRK)

Days of sales outstanding (DSO)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Receivables turnover		6.24	5.81	6.27	5.28	5.29
DSO	days	58.46	62.84	58.18	69.17	69.02

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.24
= 58.46

Based on the data provided, Merck & Company Inc's Days Sales Outstanding (DSO) has shown some fluctuations over the years. The DSO is a measure of how long it takes for a company to collect payments from its customers after making a sale.

In December 31, 2020, the DSO was 69.02 days, indicating that on average, it took the company around 69 days to collect receivables from its customers. This metric remained relatively stable in December 31, 2021, with a slight increase to 69.17 days.

However, there was a notable decrease in DSO in December 31, 2022, dropping to 58.18 days. This suggests that Merck & Company Inc improved its collections process, potentially leading to quicker cash inflows from sales.

By December 31, 2023, the DSO had increased again to 62.84 days, indicating a slight delay in receivables collections compared to the previous year. Nevertheless, it remained lower than the levels observed in 2020 and 2021.

In the most recent year, December 31, 2024, the DSO dropped to 58.46 days, approaching the lower level seen in 2022. This could suggest ongoing efforts to efficiently manage accounts receivable and improve cash flows.

Overall, monitoring the trend of DSO can provide insights into Merck & Company Inc's efficiency in collecting payments from customers and managing its working capital effectively. The company's ability to maintain a relatively stable or decreasing DSO over time may indicate effective credit and collection policies, contributing to its financial health.