Stepan Company (SCL)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 5.46 | 6.32 | 5.58 | 6.18 | 6.67 | |
| DSO | days | 66.80 | 57.79 | 65.46 | 59.02 | 54.70 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.46
= 66.80
Stepping Co.'s Days Sales Outstanding (DSO) measures the average number of days it takes for the company to collect revenue after making a sale. The trend in DSO over the past five years indicates Stepan Co.'s efficiency in collecting accounts receivable.
In 2023, the DSO increased to 66.24 days from 57.50 days in 2022. This suggests that the company took longer to collect revenue from sales in 2023 compared to the prior year. The increase in DSO may indicate challenges with accounts receivable management or changes in customer payment behavior.
Comparing to 2021, where the DSO was at 65.27 days, there was a slight increase in 2023. However, it was lower than the DSO reported in 2020 and 2019, indicating that Stepan Co. may have improved its accounts receivable collection efficiency in the recent years.
Overall, Stepan Co. should continue monitoring its DSO closely to ensure timely collection of receivables and maintain healthy cash flow. Further analysis of the underlying reasons for fluctuations in DSO could provide insights into areas for improvement in the company's revenue collection process.
Peer comparison
Dec 31, 2023