Powell Industries Inc (POWL)
Days of sales outstanding (DSO)
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 6.77 | 10.03 | 12.00 | 14.73 | 9.21 | |
| DSO | days | 53.92 | 36.37 | 30.42 | 24.78 | 39.65 |
September 30, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.77
= 53.92
To analyze Powell Industries, Inc.'s days of sales outstanding (DSO) over the past five years, we can observe a trend of fluctuating DSO figures. In 2019, the DSO stood at 79.27 days, a relatively high number, before dropping significantly to 49.58 days in 2020. This was followed by a notable increase to 60.86 days in 2021 and a further rise to 72.79 days in 2022. However, there was a substantial increase to 107.88 days in 2023, indicating a substantial increase in the time it takes to collect revenue from sales.
The increase in DSO can potentially signal issues in the company's accounts receivable management. A rising DSO implies that the company is taking longer to collect payments from its customers, which can impact its cash flow and working capital. This may indicate possible inefficiencies in the company's credit and collection policies or difficulties in customer payments, which would require attention to improve liquidity and financial performance.
It is essential for Powell Industries, Inc. to closely monitor and manage its DSO in order to ensure timely collections and maintain healthy cash flow. Moreover, an in-depth analysis of the reasons behind the upward trend in DSO is vital for effective decision-making and implementing strategies to address any underlying issues.
Peer comparison
Sep 30, 2023