Norfolk Southern Corporation (NSC)

Days of Sales Outstanding (DSO) is a financial ratio that measures the average number of days a company takes to collect revenue after making a sale. A lower DSO indicates that the company is collecting payments from customers more quickly.

In the case of Norfolk Southern Corp., the trend in DSO over the past five years has been increasing, which suggests that the company may be taking longer to collect payments from customers. In 2019, the DSO was 29.73 days, and it has steadily increased to 34.44 days by the end of 2023.

The increase in DSO could indicate potential issues with the company's accounts receivable management or the creditworthiness of its customers. A higher DSO may lead to cash flow problems as the company may be waiting longer to receive payments, impacting its liquidity and working capital.

It would be important for Norfolk Southern Corp. to analyze the reasons behind the increasing DSO and implement strategies to improve its accounts receivable collection process. This could involve tightening credit policies, improving invoice management, and enhancing customer communication to ensure timely payments and better cash flow management.

Peer comparison

Dec 31, 2023

See also:

Norfolk Southern Corporation Average Receivable Collection Period