Power Integrations Inc (POWI)

Days of sales outstanding (DSO)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Receivables turnover		15.42	30.29	31.25	16.99	13.60
DSO	days	23.67	12.05	11.68	21.48	26.84

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 15.42
= 23.67

The Days Sales Outstanding (DSO) ratio for Power Integrations Inc has shown a decreasing trend over the years, indicating an improvement in the company's ability to collect its accounts receivable efficiently.

As of December 31, 2020, the DSO was 26.84 days, and it dropped to 21.48 days by the end of December 31, 2021. This reduction suggests that the company has been able to collect payments from customers more quickly within a shorter time frame.

Further improvement was observed in the following years, as the DSO decreased to 11.68 days by December 31, 2022, and slightly increased to 12.05 days by December 31, 2023. This shows that the company's credit and collection processes remain efficient, with a more streamlined and effective accounts receivable management system.

However, there was a slight increase in the DSO to 23.67 days by December 31, 2024. This uptick may raise a flag for potential concerns about slower collections or changes in customer payment behaviors during that period.

Overall, the decreasing trend in the DSO ratio for Power Integrations Inc reflects positively on its financial health and indicates effective credit management strategies which have been successful in optimizing the company's working capital management.