Scotts Miracle-Gro Company (SMG)
Days of sales outstanding (DSO)
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 20.10 | 11.08 | 12.72 | 10.00 | 8.53 | |
| DSO | days | 18.16 | 32.93 | 28.68 | 36.49 | 42.78 |
September 30, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 20.10
= 18.16
The Days of Sales Outstanding (DSO) measures how efficiently a company is collecting its accounts receivable. A lower DSO indicates quicker conversion of sales into cash, which is typically seen as positive as it signifies better liquidity and potentially fewer credit risks.
Analyzing the historical trend of Scotts Miracle-Gro Company's DSO, we observe a consistent improvement over the past five years:
- As of Sep 30, 2024, the DSO stands at 18.16 days, marking a substantial decrease from the previous year's 32.93 days.
- Comparing to Sep 30, 2020, where the DSO was 42.78 days, the current DSO of 18.16 days indicates a significant enhancement in receivables collection efficiency over the five-year period.
This improvement suggests that Scotts Miracle-Gro Company has been managing its receivables more effectively, likely through better credit policies or enhanced collection efforts. The company's ability to convert sales into cash more promptly can positively impact its cash flow and working capital management. Continued monitoring of DSO trends will be crucial to assess the company's ongoing financial health and operational efficiency.
Peer comparison
Sep 30, 2024