ProPetro Holding Corp (PUMP)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		6.86	5.92	6.84	9.34	9.64
DSO	days	53.23	61.66	53.34	39.08	37.87

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.86
= 53.23

In analyzing ProPetro Holding Corp's Days Sales Outstanding (DSO) over the past five years, a few key trends can be observed. The DSO measures how long it takes for a company to collect payment after making a sale.

From 2019 to 2020, there was a significant decrease in DSO from 37.87 days to 39.08 days, indicating that ProPetro was able to collect payments more quickly in 2020. However, in 2021, the DSO increased to 53.34 days, suggesting a slower collection of receivables compared to the previous year.

In 2022, there was a further increase in DSO to 61.66 days, indicating a worsening trend in collecting payments from customers. Nonetheless, in 2023, there was a slight improvement as the DSO decreased to 53.23 days, but it remained higher than the levels seen in 2020 and 2021.

Analyzing the DSO trend allows us to assess ProPetro's efficiency in managing its accounts receivable. A decreasing DSO typically indicates that the company is collecting payments more efficiently, while an increasing DSO may suggest potential issues with receivables management or customer creditworthiness. It is important for ProPetro to closely monitor and potentially improve its accounts receivable collection process to maintain healthy cash flow and liquidity.