Papa John's International Inc (PZZA)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		20.58	20.37	22.07	17.87	18.25
DSO	days	17.74	17.92	16.54	20.42	20.00

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 20.58
= 17.74

Days Sales Outstanding (DSO) is a metric used to evaluate how efficiently a company collects its accounts receivable. A lower DSO indicates faster collections, which is generally favorable for a company as it reduces the risk of bad debts and improves cash flow.

Analyzing the trend of Papa John's International, Inc.'s DSO over the past five years, we observe fluctuations in the metric:
- In 2023, the DSO decreased to 19.14 days from 20.52 days in 2022, indicating an improvement in the company's accounts receivable collection efficiency.
- Similarly, in 2021, the DSO was 18.19 days, reflecting a lower DSO compared to the previous years.
- However, in 2020 and 2019, the DSO was relatively higher at 20.68 days and 20.90 days, respectively, suggesting a slower collection of accounts receivable during those periods.

Overall, the downward trend in DSO from 2022 to 2023 is a positive indicator of Papa John's ability to efficiently collect its outstanding sales, which may positively impact its cash flow and financial performance. Monitoring DSO trends can provide insights into the company's liquidity, operational efficiency, and potential credit risks.