Smart Global Holdings Inc (SGH)

Days of sales outstanding (DSO)

		Aug 25, 2023	Aug 26, 2022	Aug 27, 2021	Aug 28, 2020	Aug 30, 2019
Receivables turnover		6.33	4.37	4.76	5.35	5.69
DSO	days	57.62	83.54	76.65	68.22	64.09

August 25, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.33
= 57.62

To analyze SMART Global Holdings Inc's days of sales outstanding (DSO), we compare the DSO values over the past five years. DSO represents the average number of days it takes for a company to collect its accounts receivable, providing insight into its efficiency in managing receivables.

The DSO trend for SMART Global Holdings Inc indicates a noteworthy improvement in collection efficiency over the past five years. The DSO decreased from 82.32 days in 2022 to 55.52 days in 2023, reflecting a faster collection of receivables. This suggests the company has been more effective in converting its accounts receivable into cash, potentially indicating stronger control over credit issuance and improved collections procedures.

Furthermore, the consistently decreasing trend from 2020 to 2023 is a positive indicator of SMART Global Holdings Inc's enhanced liquidity position and potentially improving working capital management. A declining DSO signifies that the company is collecting payments from customers more rapidly, thereby freeing up cash for operational and investing activities.

This consistent improvement in DSO over the past five years reflects positively on SMART Global Holdings Inc's ability to efficiently manage its receivables, potentially enhancing its overall financial health and liquidity position.