STERIS plc (STE)

Days of sales outstanding (DSO)

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Receivables turnover		5.10	4.89	5.74	5.10	5.17
DSO	days	71.62	74.69	63.61	71.58	70.63

March 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.10
= 71.62

In analyzing the days of sales outstanding (DSO) for STERIS plc over the past five years, we observe fluctuations in this metric. The DSO for the fiscal year ending March 31, 2024, stood at 71.62 days, slightly lower than the previous year's DSO of 74.69 days. This indicates that the company took slightly less time to collect its accounts receivable in the most recent period compared to the prior year.

Looking further back, STERIS plc experienced a decrease in DSO in fiscal year 2022 compared to fiscal year 2021, with DSO at 63.61 days and 71.58 days, respectively. This improvement suggests that the company was more efficient in collecting payments from customers in 2022. However, in fiscal year 2021, the DSO increased compared to the previous year, indicating a longer period required to collect receivables.

Moreover, in fiscal year 2020, the DSO was 70.63 days, showing stability compared to the following years. It is important to note that a lower DSO is generally favorable as it signifies that the company is able to collect payments from customers more quickly, improving cash flow and liquidity.

Overall, while there have been fluctuations in STERIS plc's DSO over the past five years, the company managed to reduce its DSO in fiscal year 2024 compared to the prior year. Monitoring changes in DSO can provide insights into the efficiency of the company's accounts receivable management and its ability to convert sales into cash.