Sherwin-Williams Co (SHW)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 9.14 | 8.48 | 8.29 | 8.66 | 8.57 | |
| DSO | days | 39.93 | 43.05 | 44.05 | 42.13 | 42.59 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 9.14
= 39.93
Days Sales Outstanding (DSO) measures the average number of days it takes for a company to collect revenue after a sale has been made. A lower DSO indicates faster collection of receivables, which is generally favorable for a company as it signifies efficient cash flow management.
Analyzing Sherwin-Williams Co.'s DSO over the past five years, we observe a decreasing trend from 42.59 days in 2019 to 39.08 days in 2023. This trend suggests an improvement in the company's accounts receivable collection efficiency over the years.
In 2023, Sherwin-Williams Co.'s DSO stands at 39.08 days, reflecting that, on average, it takes approximately 39 days for the company to collect its sales revenue. Comparing this figure to previous years, it is below the DSO levels of 42.25 days in 2022, 43.05 days in 2021, and 41.31 days in 2020.
The decreasing trend in DSO indicates that Sherwin-Williams Co. has been more effective in collecting payments from its customers, potentially enhancing its liquidity position and cash flow management. However, it is essential to monitor any further fluctuations in DSO to ensure the company's continued efficiency in collecting receivables.
Peer comparison
Dec 31, 2023