ServiceNow Inc (NOW)

Days of sales outstanding (DSO)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Receivables turnover		4.90	8.00	6.56	7.26	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
DSO	days	74.44	45.62	55.66	50.29	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

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.90
= 74.44

Days Sales Outstanding (DSO) is a key metric used by analysts to evaluate how efficiently a company collects its accounts receivable. It measures the average number of days it takes for a company to collect revenue after a sale is made.

Analyzing the DSO for ServiceNow Inc from March 31, 2020, to December 31, 2024, we observe fluctuations in the number of days it takes for the company to collect its sales proceeds.

From the data provided, we can see that the DSO for ServiceNow Inc has varied over the periods, with a range from as low as 45.62 days to as high as 86.90 days. A lower DSO indicates that the company is collecting its accounts receivable more quickly, which is favorable, as it implies efficient revenue collection.

There are instances where the DSO decreases, indicating improved efficiency in collecting sales proceeds, such as from December 31, 2020, to March 31, 2021, where there was a notable drop from 81.53 days to 48.71 days. On the contrary, there are periods where the DSO increases, reflecting possible challenges in collecting outstanding accounts receivable.

Overall, monitoring the trend of DSO can provide insights into the company's credit and collection policies, as well as its liquidity position. For ServiceNow Inc, analyzing the DSO over time can help stakeholders assess the effectiveness of the company's accounts receivable management strategies and its ability to convert sales into cash efficiently.