Roivant Sciences Ltd (ROIV)

Days of sales outstanding (DSO)

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022
Receivables turnover		1.68	1.10	12.44
DSO	days	217.11	332.86	29.34

March 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 1.68
= 217.11

Roivant Sciences Ltd's Days Sales Outstanding (DSO) ratio has exhibited significant fluctuations over the past three years. As of March 31, 2024, the company's DSO stood at 217.11 days, representing a notable improvement from the previous year's 332.86 days. This decrease indicates that Roivant Sciences has become more efficient in collecting its accounts receivable, which could potentially enhance its cash flow and overall liquidity position.

However, it is worth noting that the DSO ratio in the year ended March 31, 2022, was significantly lower at 29.34 days compared to the current year. This sudden drop suggests a sharp increase in the collection of receivables during that period, possibly due to tighter credit policies, improved collection processes, or better management of customer credit terms.

The fluctuating trend in Roivant Sciences Ltd's DSO ratio highlights the importance of closely monitoring the company's accounts receivable management practices. A lower DSO generally indicates a more efficient credit and collection process, while a higher DSO may signal potential issues in collecting receivables promptly. Tracking DSO over time can provide valuable insights into the company's liquidity, operational efficiency, and effectiveness in managing its credit operations.