Snap-On Inc (SNA)
Days of sales outstanding (DSO)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 3.30 | 3.39 | 3.38 | 3.45 | 3.07 | |
| DSO | days | 110.46 | 107.62 | 108.07 | 105.89 | 118.83 |
December 31, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 3.30
= 110.46
Snap-On Inc's Days Sales Outstanding (DSO) measures how long it takes the company to collect payment from its customers after making a sale. Looking at the trend over the past five years, we observe a gradual decrease in DSO, indicating an improvement in the company's ability to efficiently convert sales into cash.
As of December 31, 2020, Snap-On Inc had a DSO of 118.83 days, which decreased to 105.89 days by December 31, 2021. This significant reduction suggests that the company became more effective in managing its accounts receivable and collecting payments from customers in a timelier manner.
During the subsequent years, the DSO continued to slightly decrease, reaching 108.07 days by December 31, 2022, 107.62 days by December 31, 2023, and 110.46 days by December 31, 2024. While the DSO increased slightly in 2024 compared to the previous year, it remains at a lower level than the original figure in 2020.
Overall, the downward trend in DSO indicates that Snap-On Inc has been successful in streamlining its credit and collection processes, potentially leading to improved cash flows and liquidity. It is crucial for the company to continue monitoring and managing its DSO to ensure efficient cash flow management in the future.
Peer comparison
Dec 31, 2024