JM Smucker Company (SJM)
Days of sales outstanding (DSO)
| Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | Apr 30, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 11.10 | 14.26 | 15.37 | 15.16 | 14.08 | |
| DSO | days | 32.88 | 25.59 | 23.74 | 24.07 | 25.93 |
April 30, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 11.10
= 32.88
Based on the historical data provided, JM Smucker Company's Days Sales Outstanding (DSO) has exhibited some fluctuations over the past five years. DSO measures the average number of days it takes for the company to collect revenue after a sale is made.
The trend shows an increase in DSO from 24.07 days in 2021 to 32.88 days in 2024, indicating that the company is taking longer to collect its accounts receivable. This could signify potential challenges in collecting cash efficiently from customers and managing its working capital effectively.
Although the DSO has fluctuated in the last five years, the upward trend in recent years may raise concerns about the company's credit and collection policies or the creditworthiness of its customers. Management should closely monitor and take proactive steps to improve DSO to ensure a healthy cash flow and efficient operations.