ServiceNow Inc (NOW)

Days of sales outstanding (DSO)

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Receivables turnover		4.41	7.26	7.33	6.87	4.20	7.70	7.74	7.59	4.24	7.13	6.62	7.49	4.48	6.69	6.26	6.04	4.14	5.98	5.98	6.65
DSO	days	82.84	50.31	49.76	53.13	86.90	47.37	47.17	48.07	86.06	51.21	55.13	48.71	81.53	54.58	58.34	60.41	88.11	61.07	61.01	54.92

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.41
= 82.84

To analyze the days of sales outstanding (DSO) for ServiceNow Inc, we can see a fluctuation in the DSO over the past eight quarters. DSO measures the average number of days it takes for a company to collect payment after a sale has been made. A lower DSO indicates that the company is collecting payment more quickly, while a higher DSO suggests a longer collection period.

Looking at the data, we observe that the DSO has shown variability, with the highest value recorded at 105.49 days on Dec 31, 2022, and the lowest at 64.77 days on Sep 30, 2022. This variability may reflect changes in the company's collection processes, customer credit policies, or the overall economic environment.

It's essential to monitor DSO closely, as a consistently high DSO could indicate potential issues with credit and collections management, which may lead to cash flow problems. Conversely, a consistently low DSO could suggest overly aggressive revenue recognition practices.

Further analysis of the company's industry and historical trends in DSO would provide a clearer understanding of ServiceNow Inc's DSO performance and its implications for the company's financial health and efficiency in collecting receivables.