Progress Software Corporation (PRGS)

Days of sales outstanding (DSO)

		Nov 30, 2023	Nov 30, 2022	Nov 30, 2021	Nov 30, 2020	Nov 30, 2019
Receivables turnover		5.52	6.15	5.32	5.26	5.68
DSO	days	66.13	59.32	68.57	69.38	64.31

November 30, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.52
= 66.13

Days Sales Outstanding (DSO) is a crucial metric that indicates the average number of days it takes for a company to collect payment after making a sale. Looking at the DSO trend of Progress Software Corp. over the past five years, it is evident that there has been fluctuation in the collection period.

In 2023, the DSO stood at 81.88 days, showing an increase from the previous year's 77.00 days. This upturn in DSO suggests that there may be delays in the company's collection of accounts receivable compared to the prior year. It is essential for the company to monitor and manage its receivables effectively to ensure timely cash flow and minimize the risk of bad debts.

In 2021, there was a notable decrease in DSO to 86.31 days compared to 89.95 days in 2020. This reduction signifies an improvement in the company's receivables collection efficiency, possibly attributed to more effective credit and collection policies or improved customer payment behavior.

The lowest DSO was observed in 2019 at 73.92 days, indicating a faster collection period. This may be indicative of efficient accounts receivable management and timely collection of payments from customers.

Overall, the fluctuation in DSO over the years highlights the importance of closely monitoring changes in accounts receivable collection. A rising DSO could indicate potential challenges in cash flow and working capital management, while a declining DSO may signify improved efficiency in receivables management. Therefore, it is crucial for Progress Software Corp. to continuously assess and optimize its credit and collection processes to maintain healthy cash flows and financial stability.