PDF Solutions Inc (PDFS)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		3.69	2.68	2.14	2.13	1.78
DSO	days	98.83	136.01	170.53	171.38	204.93

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 3.69
= 98.83

Days Sales Outstanding (DSO) measures the average number of days it takes for a company to collect revenue after a sale is made. A lower DSO value indicates that the company is collecting payments more quickly, which is typically seen as a positive indicator of efficiency in managing accounts receivable.

Looking at the trend for PDF Solutions Inc. over the past five years, we observe a decreasing trend in DSO from 173.37 days in 2019 to 98.83 days in 2023. This suggests that the company has been improving its accounts receivable management efficiency and is collecting cash from its customers more quickly over time.

The decreasing trend in DSO may indicate that PDF Solutions Inc. has implemented more effective credit policies, improved collection processes, or has better customer payment terms. A lower DSO can also indicate a stronger customer base that pays promptly or an increase in cash sales relative to credit sales.

Overall, the decreasing trend in DSO for PDF Solutions Inc. is a positive sign of improved accounts receivable management and cash flow efficiency, which can contribute to the company's financial stability and performance.