Royal Caribbean Cruises Ltd (RCL)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		30.48	13.91	0.25	3.65	34.55
DSO	days	11.97	26.24	1,484.04	99.96	10.57

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 30.48
= 11.97

Days of Sales Outstanding (DSO) is a financial metric that measures the average number of days a company takes to collect revenue after a sale is made. In the case of Royal Caribbean Group, the DSO has shown fluctuations over the past five years:

1. Dec 31, 2019: The DSO was 10.19 days, indicating that Royal Caribbean was efficient in collecting revenues from customers at that time.

2. Dec 31, 2020: The DSO increased to 46.96 days, suggesting a significant delay in collecting payments from customers compared to the previous year.

3. Dec 31, 2021: The DSO further increased to 97.21 days, reaching a peak in the period under consideration. This rise may imply challenges in the company's collection processes or potential issues with customer payment behavior.

4. Dec 31, 2022: The DSO decreased to 21.93 days, showing some improvement in collecting payments faster compared to the previous year.

5. Dec 31, 2023: The DSO further decreased to 10.63 days, nearing the levels seen in 2019. This improvement suggests that Royal Caribbean has made strides in enhancing its collection efficiency.

Overall, the trend in DSO for Royal Caribbean Group indicates fluctuations in the company's ability to collect revenues in a timely manner. A lower DSO is generally favorable as it indicates quicker cash conversion and efficient credit management. Management should continue to monitor DSO closely to ensure timely collections and optimize working capital efficiency.