Standard Motor Products Inc (SMP)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		16.68	15.96	14.37	11.38	16.75
DSO	days	21.88	22.87	25.40	32.06	21.79

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 16.68
= 21.88

The days of sales outstanding (DSO) for Standard Motor Products, Inc. have shown a fluctuating trend over the past five years. In 2023, the DSO decreased to 43.07 days from 44.60 days in 2022. This suggests that the company is collecting its accounts receivable more efficiently compared to the previous year.

Comparing to 2021 and 2020 where the DSO was 50.75 days and 64.05 days respectively, the decreasing trend in DSO indicates an improvement in the company's ability to convert its accounts receivable into cash.

However, it is worth noting that the DSO in 2019 was 43.47 days, which is similar to the DSO in 2023. This may indicate that the company is back to its previous level of efficiency in collecting payments from customers.

Overall, a lower DSO is generally favorable as it signifies faster collection of receivables, improving cash flow and liquidity for the company. The fluctuation in DSO over the years could be attributed to changes in credit policies, customer payment behavior, or economic conditions impacting the company's sales cycle.