Murphy Oil Corporation (MUR)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		10.06	10.05	8.91	7.51	6.63
DSO	days	36.29	36.30	40.98	48.61	55.05

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 10.06
= 36.29

Murphy Oil Corp.'s Days of Sales Outstanding (DSO) have shown a decreasing trend over the past five years, indicating an improvement in the company's accounts receivable collection efficiency. The DSO decreased from 55.30 days in 2019 to 36.41 days in 2023. This suggests that in 2023, on average, Murphy Oil Corp. collected its accounts receivable within approximately 36.41 days after making a sale.

The decreasing DSO trend is a positive indicator as it signifies that the company is managing its accounts receivable more effectively, potentially leading to improved cash flow and lower credit risk. The decline in DSO from 48.93 days in 2020 to 36.41 days in 2023 reflects the company's ability to convert sales into cash more quickly over the years. This improvement could be attributed to efficient credit policies, effective collection procedures, or a customer base with better payment terms.

Overall, the declining trend in Murphy Oil Corp.'s DSO implies a better management of accounts receivable and a positive financial performance in terms of cash flow and liquidity. It indicates that the company has been successful in accelerating the collection of outstanding receivables, which is essential for maintaining a healthy financial position.