Premier Inc (PINC)
Days of sales outstanding (DSO)
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 10.63 | 11.59 | 12.56 | 12.17 | 9.62 | |
| DSO | days | 34.35 | 31.50 | 29.07 | 30.00 | 37.93 |
June 30, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 10.63
= 34.35
Premier Inc's Days Sales Outstanding (DSO) is a metric that indicates the average number of days the company takes to collect revenue after making a sale. A lower DSO value is generally favorable as it signifies faster cash collection and better working capital management.
Looking at Premier Inc's DSO trend over the past five years, there has been a fluctuating pattern. In the most recent year, as of June 30, 2024, the DSO stands at 34.35 days, which has increased compared to the prior year where it was 31.50 days. This uptick may indicate a potential slowdown in collections efficiency as it takes longer for the company to convert sales into cash.
Compared to two years ago, in June 2022, Premier Inc had a DSO of 29.07 days, reflecting a relatively shorter collection period. However, the DSO has increased since then, suggesting a weakening in collections performance.
It's worth noting that in the fiscal year ending June 30, 2020, Premier Inc had the highest DSO of 37.93 days in the period under review, which indicates an improvement in collections efficiency over the past four years.
Overall, Premier Inc should focus on monitoring and potentially improving its collections process to bring down the DSO figure, which would enhance liquidity and working capital management.
Peer comparison
Jun 30, 2024