Middlesex Water Company (MSEX)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		5.60	6.53	6.01	6.19	6.66
DSO	days	65.19	55.89	60.75	58.95	54.78

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.60
= 65.19

Days Sales Outstanding (DSO) is a key metric used to evaluate how efficiently a company is collecting its accounts receivable. A higher DSO value indicates that the company is taking longer to collect its revenue from customers, which could potentially indicate issues with credit policies, collection processes, or customer financial health.

Analyzing Middlesex Water Co.'s DSO over the past five years, we observe a fluctuating trend. The DSO increased from 51.77 days in 2019 to 57.59 days in 2021, showcasing a potential delay in collecting accounts receivable during this period. However, in 2022, there was a slight improvement as the DSO decreased to 55.45 days, suggesting a more efficient collection process.

Notably, in 2023, the DSO increased to 60.30 days, indicating a reversal in the positive trend seen in the previous year. This could raise concerns about the company's ability to collect revenue in a timely manner and could potentially signal challenges in managing accounts receivable effectively.

Overall, monitoring DSO trends can provide valuable insights into the liquidity and efficiency of Middlesex Water Co.'s accounts receivable management, highlighting areas that may require attention or improvement in order to optimize cash flow and working capital management.