Merck & Company Inc (MRK)

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		6.24	5.55	5.37	5.40	5.81	5.71	5.29	5.56	6.27	6.22	5.93	5.49	5.28	5.38	5.60	5.08	5.51	4.33	5.01	4.93
DSO	days	58.46	65.76	68.01	67.56	62.84	63.96	69.04	65.69	58.18	58.69	61.57	66.46	69.17	67.82	65.20	71.81	66.20	84.25	72.86	73.99

December 31, 2024 calculation

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

Days Sales Outstanding (DSO) is a key metric used to evaluate how efficiently a company manages its accounts receivable. For Merck & Company Inc, the trend in DSO over the past few years shows fluctuations but overall stability.

In March 2024, Merck had a DSO of 67.56 days, indicating that on average, the company collects its accounts receivable in approximately 67.56 days. This represents a slight increase from the previous quarter.

Looking at the trend, there was a decrease in DSO from September 2023 to December 2023, where it dropped to 62.84 days, suggesting improved efficiency in collecting receivables. However, there was an increase in DSO in the subsequent quarters, reaching 68.01 days by June 2024.

It is worth noting that a lower DSO is generally preferred as it indicates quicker collection of receivables, which can improve cash flow and liquidity. On the other hand, a consistently high DSO may signal potential issues with collections or credit policies.

Overall, Merck & Company Inc's DSO trend indicates some variability but remains within a reasonable range. It would be important for the company to monitor and potentially improve its accounts receivable management to maintain efficient operations and financial health.