Organon & Co (OGN)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Receivables turnover | 3.59 | 4.19 | 4.56 | |
| DSO | days | 101.64 | 87.20 | 80.02 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 3.59
= 101.64
Organon & Co.'s Days Sales Outstanding (DSO) has shown an increasing trend over the past five years. In the most recent year, as of December 31, 2023, the DSO stood at 101.64 days, representing the number of days it takes, on average, for the company to collect its accounts receivable.
Comparing this to the previous years, we observe a noticeable increase in DSO from 87.20 days in 2022, 80.02 days in 2021, 60.33 days in 2020, to 69.18 days in 2019. This lengthening DSO trend indicates that Organon & Co. may be experiencing challenges in efficiently collecting payments from its customers or that its credit policies have become more lenient.
A high DSO value suggests potential liquidity issues as it implies that a significant amount of the company's cash is tied up in accounts receivable for an extended period. It may be necessary for Organon & Co. to review its credit terms, collection procedures, and customer creditworthiness to improve cash flow and working capital management.
Further analysis is recommended to determine the specific factors contributing to the increase in DSO and to implement strategies aimed at optimizing accounts receivable management and enhancing overall financial performance.
Peer comparison
Dec 31, 2023