SPS Commerce Inc (SPSC)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		11.46	11.43	11.15	9.31	8.85
DSO	days	31.84	31.92	32.74	39.20	41.23

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 11.46
= 31.84

The days sales outstanding (DSO) ratio for SPS Commerce Inc. has shown a decreasing trend over the past five years. In 2023, the DSO stands at 31.84 days, which is slightly lower compared to the previous year's figure of 31.92 days. This indicates that the company is collecting its accounts receivable more efficiently.

Furthermore, the DSO has notably improved from 2019 when it was as high as 41.23 days. This reflects a positive development in the company's ability to convert its credit sales into cash. A decreasing DSO typically signifies that the company is managing its credit and collections processes effectively.

Overall, the declining trend in the DSO for SPS Commerce Inc. suggests that the company has been successful in streamlining its accounts receivable management, which could have positive implications for its liquidity and cash flow position.