Planet Fitness Inc (PLNT)
Days of sales outstanding (DSO)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 12.22 | 17.50 | 12.80 | 11.48 | 8.45 | |
| DSO | days | 29.86 | 20.86 | 28.51 | 31.79 | 43.22 |
December 31, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 12.22
= 29.86
Days Sales Outstanding (DSO) is a crucial metric for assessing how efficiently a company manages its accounts receivable. Lower DSO values indicate that the company is collecting payments from customers more quickly, which can be a positive sign of cash flow management.
For Planet Fitness Inc, the trend in DSO over the years shows a consistent improvement in collecting payments from customers. In December 2020, the company had a DSO of 43.22 days, which decreased to 31.79 days by December 2021. The trend continued as the DSO declined to 28.51 days by December 2022, indicating an enhanced efficiency in collections.
In December 2023, the DSO made a significant drop to 20.86 days, reflecting a considerable improvement in accounts receivable management. However, by December 2024, the DSO increased slightly to 29.86 days, which, while higher than the previous year, is still lower compared to the earlier periods.
Overall, the declining trend in DSO for Planet Fitness Inc suggests that the company has been successful in accelerating its collection process, potentially improving cash flow and overall financial performance. This positive trend indicates effective credit management and a focus on timely collection of receivables, which is essential for sustaining healthy financial operations.