PriceSmart Inc (PSMT)

Days of sales outstanding (DSO)

		Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Receivables turnover		234.40	254.93	245.32	286.19	258.56	221.01	303.64	271.42	254.57	238.75	292.89	288.10	288.49	224.07	253.11	304.97	303.40	316.35	326.57	335.38
DSO	days	1.56	1.43	1.49	1.28	1.41	1.65	1.20	1.34	1.43	1.53	1.25	1.27	1.27	1.63	1.44	1.20	1.20	1.15	1.12	1.09

February 29, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 234.40
= 1.56

Days Sales Outstanding (DSO) is a financial ratio that measures the average number of days it takes for a company to collect payment after making a sale. A lower DSO generally indicates that a company is collecting payments from its customers more quickly, which is a positive sign of efficient accounts receivable management.

Analyzing the DSO trend for PriceSmart Inc over the past few quarters, we observe some fluctuations. The DSO has ranged from 1.09 days to 1.65 days over the last five quarters. Typically, a stable or decreasing trend in DSO is preferable as it reflects efficient collection practices and indicates that customers are paying in a timely manner.

In the most recent quarter, the DSO was 1.56 days, slightly higher compared to the previous quarter at 1.43 days. Although the increase is relatively small, monitoring this trend in future quarters would be important to see if it stabilizes or continues to rise, which could potentially indicate challenges in accounts receivable management.

It's worth noting that PriceSmart Inc generally maintains a low DSO, which suggests that the company has effective credit and collection policies in place. However, management should continue to monitor the trend and take actions if necessary to ensure timely collections and healthy cash flows.