MSC Industrial Direct Company Inc (MSM)
Days of sales outstanding (DSO)
| Aug 31, 2024 | Jun 1, 2024 | Mar 2, 2024 | Dec 2, 2023 | Sep 2, 2023 | Jun 3, 2023 | Mar 4, 2023 | Dec 3, 2022 | Sep 3, 2022 | May 28, 2022 | Feb 26, 2022 | Nov 27, 2021 | Aug 28, 2021 | May 29, 2021 | Feb 27, 2021 | Nov 28, 2020 | Aug 29, 2020 | May 30, 2020 | Feb 29, 2020 | Nov 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Receivables turnover | 9.24 | 9.22 | 9.20 | 9.59 | 9.13 | — | — | — | 5.36 | 5.22 | 5.47 | 5.71 | 5.76 | 5.57 | 5.91 | 6.34 | 6.47 | 6.02 | 6.17 | 6.24 | |
| DSO | days | 39.50 | 39.60 | 39.67 | 38.07 | 40.00 | — | — | — | 68.13 | 69.86 | 66.68 | 63.91 | 63.36 | 65.48 | 61.76 | 57.61 | 56.44 | 60.68 | 59.17 | 58.45 |
August 31, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 9.24
= 39.50
The days of sales outstanding (DSO) ratio is a measure used to evaluate how efficiently a company is managing its accounts receivable by indicating the average number of days it takes to collect payment after making a sale. A lower DSO indicates quicker collection of receivables, which is generally favorable as it reflects a faster cash conversion cycle.
Analyzing the DSO trend for MSC Industrial Direct Company Inc over the period provided, we observe a relatively stable performance in recent quarters with DSO figures ranging between 38.07 days to 40.00 days. This consistency suggests that the company has been effective in managing its accounts receivable and maintaining a timely collection of payments from customers.
However, it is worth noting the significant increase in DSO to 68.13 days and 69.86 days in the past, which may indicate potential challenges in collecting receivables efficiently during those periods. A high DSO can tie up working capital and signal potential liquidity issues if not addressed promptly.
Overall, the stable and relatively low DSO figures in recent quarters indicate effective accounts receivable management by MSC Industrial Direct Company Inc, contributing to improved cash flow and financial health. Continued monitoring of DSO and proactive measures to reduce collection times further could enhance the company's overall liquidity position and operational efficiency.
Peer comparison
Aug 31, 2024