Rockwell Automation Inc (ROK)
Days of sales outstanding (DSO)
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 4.25 | 4.32 | 4.87 | 4.98 | 5.63 | |
| DSO | days | 85.95 | 84.52 | 75.02 | 73.34 | 64.89 |
September 30, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.25
= 85.95
To analyze Rockwell Automation Inc's days of sales outstanding (DSO) over the past five years, we need to assess the trend and implications of the changing DSO values. The DSO measures the average number of days it takes for a company to collect its accounts receivable.
From 2019 to 2023, Rockwell Automation's DSO has shown a steady increasing trend, rising from 64.26 days in 2019 to 87.34 days in 2023. This indicates that it is taking the company longer to collect payments from its customers.
The upward trend in DSO can signify potential issues with the company's accounts receivable management and collection processes. A higher DSO may indicate difficulty in collecting outstanding debts, potential credit risks, or possible inefficiencies in the company's sales and collection operations.
Given the upward trend in DSO, it would be prudent to further investigate the company's credit and collection policies, as well as assess the quality of its customer base and the effectiveness of its accounts receivable management.
Overall, the increasing DSO trend for Rockwell Automation Inc warrants closer attention to determine the underlying factors contributing to the lengthening collection period and to take necessary steps to address any potential concerns.
Peer comparison
Sep 30, 2023