Powell Industries Inc (POWL)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Receivables turnover | 4.52 | 3.39 | 3.19 | 3.52 | 3.67 | 5.04 | 4.86 | 5.28 | 5.91 | 6.00 | 6.29 | 6.35 | 6.34 | 7.37 | 5.67 | 6.29 | 5.36 | 4.60 | 4.64 | 6.02 | |
| DSO | days | 80.70 | 107.81 | 114.26 | 103.78 | 99.54 | 72.46 | 75.14 | 69.10 | 61.77 | 60.81 | 58.04 | 57.50 | 57.54 | 49.55 | 64.42 | 58.03 | 68.06 | 79.30 | 78.73 | 60.59 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.52
= 80.70
To analyze Powell Industries, Inc.'s days of sales outstanding (DSO) trend, we need to examine the DSO ratio over the past several quarters. DSO represents the average number of days it takes for a company to collect revenue after a sale is made. A higher DSO indicates that the company is taking longer to convert its sales into cash, which can potentially indicate inefficiencies in the company's accounts receivable management.
Looking at the data provided, we can observe that there has been a notable increase in DSO from the first quarter of 2022 to the second quarter of 2023, reaching a peak of 114.34 days. This suggests that Powell Industries, Inc. has been taking longer to collect its receivables during this period.
The significant increase in DSO could be a cause for concern as it may indicate potential cash flow issues. A higher DSO can also point to potential credit and collection management problems, which could impact the company's liquidity and working capital management.
It is important for Powell Industries, Inc. to closely monitor and manage its accounts receivable to ensure that DSO is kept at optimal levels. Implementing more efficient collection procedures, offering discounts for early payments, or tightening credit policies may help in reducing the DSO and improving the company's cash flow position.
In conclusion, the increasing trend in DSO for Powell Industries, Inc. warrants attention, and the company should focus on addressing the underlying reasons for the prolonged collection periods to maintain healthy cash flow and working capital management.
Peer comparison
Dec 31, 2023