NVIDIA Corporation (NVDA)

Days of sales outstanding (DSO)

		Jan 28, 2024	Oct 29, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Oct 25, 2020	Jul 26, 2020	Apr 26, 2020	Jan 26, 2020	Oct 27, 2019	Jul 28, 2019	Apr 28, 2019
Receivables turnover		6.09	5.40	4.63	6.34	7.05	5.82	5.59	—	5.79	6.14	—	—	6.86	5.80	6.27	6.18	6.59	6.89	6.52	8.64
DSO	days	59.91	67.59	78.92	57.55	51.79	62.71	65.26	—	63.06	59.45	—	—	53.17	62.89	58.22	59.10	55.40	53.01	55.94	42.25

January 28, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.09
= 59.91

Days Sales Outstanding (DSO) is a crucial metric for assessing a company's efficiency in collecting accounts receivable. NVIDIA Corp's DSO has shown fluctuations over the past 8 quarters. In Q4 2024, the DSO decreased to 59.91 days from 67.59 days in Q3 2024, indicating an improvement in the company's ability to collect receivables more promptly. The current DSO figure is also below the average DSO of the previous quarters, suggesting enhanced efficiency in managing accounts receivable.

It's worth noting that the DSO reached a peak of 78.92 days in Q2 2024, which may have raised concerns about the company's liquidity and collection processes. However, the subsequent decrease in DSO in the following quarters demonstrates management's efforts to streamline receivables collection.

Overall, NVIDIA Corp's decreasing DSO trend indicates that the company is managing its accounts receivable more effectively, potentially improving cash flows and overall financial health. Investors and analysts view a declining DSO positively as it signifies efficient credit management and a healthy working capital cycle. It would be essential to monitor future DSO trends to ensure consistency and sustainability in the company's collections operations.