Neogen Corporation (NEOG)
Days of sales outstanding (DSO)
| Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Receivables turnover | 10.47 | 11.97 | 12.92 | 10.39 | 9.57 | 8.60 | 11.41 | 10.58 | 9.70 | 8.24 | 8.37 | 7.54 | 7.73 | 9.48 | 9.57 | 8.59 | 9.02 | 8.48 | 9.13 | 8.70 | |
| DSO | days | 34.86 | 30.50 | 28.26 | 35.13 | 38.13 | 42.44 | 31.99 | 34.51 | 37.64 | 44.32 | 43.60 | 48.38 | 47.21 | 38.52 | 38.16 | 42.50 | 40.46 | 43.07 | 39.98 | 41.95 |
February 29, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 10.47
= 34.86
Days Sales Outstanding (DSO) is a key metric that measures the average number of days it takes for a company to collect revenue after a sale is made. A lower DSO indicates a more efficient collection process, while a higher DSO suggests potential issues with accounts receivable management.
Analyzing the DSO trend for Neogen Corporation over the past few quarters, we observe fluctuations in the number of days it takes for the company to collect sales. The DSO ranged from a low of 28.26 days in August 2023 to a high of 48.38 days in August 2021, showing variability in the efficiency of accounts receivable collection.
In recent quarters, there has been a general trend of decreasing DSO, which is a positive sign indicating improved collection efficiency. The DSO decreased to 30.50 days in November 2023, from 35.13 days in May 2023. This downward trend may suggest that Neogen Corporation is managing its accounts receivable more effectively, possibly through improved credit policies, collections procedures, or better customer relationships.
However, it is essential to note that in some quarters, the DSO has increased temporarily, such as the rise to 38.13 days in February 2023. This could be attributed to seasonality, changes in customer behavior, or external factors affecting payment cycles.
Overall, monitoring the DSO trend over time provides insights into Neogen Corporation's ability to efficiently manage its accounts receivable and collect revenue promptly. A consistent focus on maintaining a low DSO can help improve cash flow, liquidity, and overall financial health of the company.
Peer comparison
Feb 29, 2024