Insperity Inc (NSP)

Days of sales outstanding (DSO)

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Receivables turnover 7.94 9.31 9.51 9.67 10.90
DSO days 45.98 39.22 38.37 37.73 33.50

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 7.94
= 45.98

We will analyze the Days of Sales Outstanding (DSO) trend for Insperity Inc based on the provided data. DSO measures the average number of days a company takes to collect revenue after a sale is made.

- As of December 31, 2020, Insperity had a DSO of 33.50 days. This indicates that, on average, the company collected its accounts receivable in approximately 33.50 days.

- By December 31, 2021, the DSO increased to 37.73 days. This could suggest a slightly slower collection of accounts receivable, potentially impacting cash flow and liquidity.

- The trend continued with DSO rising to 38.37 days by December 31, 2022, and further to 39.22 days by December 31, 2023. These increases may indicate a lengthening collection period, possibly due to changes in customer payment behavior or credit terms.

- The DSO peaked at 45.98 days by December 31, 2024, signaling a notable extension in the time taken to collect revenue. A higher DSO can imply potential challenges in working capital management and a higher risk of bad debts.

In summary, the increasing trend in DSO over the years for Insperity Inc raises concerns about efficiency in accounts receivable management and liquidity. The company may need to address this trend to improve cash flow and maintain financial stability.