Paychex Inc (PAYX)
Days of sales outstanding (DSO)
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Receivables turnover | 2.82 | 2.92 | 2.86 | 3.12 | 3.25 | 3.06 | 3.12 | 3.23 | 3.51 | 3.48 | 3.46 | 3.45 | 3.50 | 3.73 | 3.16 | 3.88 | 3.85 | 3.57 | 4.01 | 4.65 | |
| DSO | days | 129.38 | 125.16 | 127.75 | 117.04 | 112.39 | 119.18 | 116.90 | 112.98 | 103.96 | 104.94 | 105.45 | 105.86 | 104.33 | 97.79 | 115.55 | 94.08 | 94.79 | 102.38 | 91.10 | 78.48 |
May 31, 2025 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 2.82
= 129.38
The analysis of Paychex Inc.'s days of sales outstanding (DSO) from August 31, 2020 through May 31, 2025, reveals a consistent upward trend over the period, indicating a gradual elongation in the time taken to collect receivables.
Initially, the DSO was approximately 78.5 days in August 2020, reflecting a relatively efficient collection process. However, over the subsequent years, the DSO increased significantly, peaking at approximately 129.38 days as of May 2025. This escalation signifies a notable deterioration in collection efficiency, with receivables remaining outstanding for longer periods.
Throughout this period, the DSO demonstrates periods of modest fluctuation, with some stabilization observed around the 94-105 day range during late 2020 and early 2022, but the general trajectory continues upward. The period from late 2022 onward exhibits more pronounced increases, culminating in the highest recorded DSO in May 2025.
This prolongation in collection cycles may suggest shifts in credit policies, changes in customer payment behaviors, or alterations in the company's receivables management practices. It warrants further investigation to determine underlying causes, as increased DSO can impact cash flow, working capital, and overall liquidity management strategies.