Simply Good Foods Co (SMPL)

Days of sales outstanding (DSO)

		Feb 24, 2024	Nov 25, 2023	Aug 26, 2023	May 27, 2023	Feb 25, 2023	Nov 26, 2022	Aug 27, 2022	May 28, 2022	Feb 26, 2022	Nov 27, 2021	Aug 28, 2021	May 29, 2021	Feb 27, 2021	Nov 28, 2020	Aug 29, 2020	May 30, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 25, 2019
Receivables turnover		8.41	9.01	8.36	8.03	7.84	7.34	8.65	7.72	9.26	8.19	8.74	7.98	9.08	9.06	9.10	11.38	7.31	7.97	11.84	11.51
DSO	days	43.42	40.52	43.68	45.46	46.57	49.72	42.22	47.26	39.42	44.55	41.77	45.75	40.20	40.27	40.11	32.06	49.91	45.80	30.83	31.70

February 24, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 8.41
= 43.42

The Days of Sales Outstanding (DSO) ratio measures the average number of days it takes for a company to collect payments from its customers. A lower DSO indicates that the company is able to collect payments more quickly, which is generally favorable.

Analyzing the historical DSO data of Simply Good Foods Co shows variability in the collection period over time. The DSO has ranged from a low of 30.83 days to a high of 49.91 days. In the most recent period, the DSO was 43.42 days, indicating that the company takes, on average, approximately 43 days to collect payments from its customers.

It's important to note that a lower DSO is generally preferred as it signifies efficient management of accounts receivable and potential liquidity improvements. Conversely, a higher DSO could imply delays in collections, potentially impacting cash flow and working capital management.

Comparing the DSO figures across multiple periods can help identify trends and potential areas for improvement in the company's accounts receivable management. Further analysis, in conjunction with other financial metrics and industry benchmarks, can provide a more comprehensive assessment of Simply Good Foods Co's overall financial health and efficiency in collecting payments from customers.