National HealthCare Corporation (NHC)
Days of sales outstanding (DSO)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 9.62 | 10.47 | 10.83 | 11.12 | 11.35 | |
| DSO | days | 37.92 | 34.87 | 33.71 | 32.81 | 32.16 |
December 31, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 9.62
= 37.92
The days of sales outstanding (DSO) for National HealthCare Corporation have shown a steady increase over the past five years, from 32.16 days as of December 31, 2020, to 37.92 days as of December 31, 2024. This trend indicates that the company's accounts receivable turnover has been slowing down, as it is taking longer for the company to collect payments from its customers.
A higher DSO could potentially be a sign of inefficiencies in the company's credit and collection processes, leading to a higher risk of bad debt or cash flow issues. It may also suggest that the company is offering more lenient credit terms to customers, which could impact its liquidity and working capital management.
It would be advisable for National HealthCare Corporation to closely monitor and improve its accounts receivable management practices to reduce DSO and enhance its cash flow position. This could involve more proactive credit control measures, timely invoicing, and ensuring prompt follow-up on outstanding payments to mitigate the risks associated with extended DSO.
Peer comparison
Dec 31, 2024