Strategic Education Inc (STRA)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		14.92	16.98	22.01	18.67	18.88
DSO	days	24.46	21.50	16.59	19.55	19.34

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 14.92
= 24.46

Days Sales Outstanding (DSO) is a key ratio that indicates the average number of days it takes for a company to collect payments from its customers. A lower DSO is typically preferred as it suggests quicker cash conversion from sales.

Looking at the trend of DSO for Strategic Education Inc over the past five years, we observe the following:

- In 2023, the DSO increased to 24.52 days from 21.57 days in 2022. This suggests that the company took longer to collect payments from customers in 2023 compared to the previous year.
- However, when compared to 2021, where DSO was 16.64 days, the increase in 2023 indicates a slowdown in cash collection efficiency.
- The DSO in 2020 was 18.33 days, slightly higher than in 2023, which may indicate improved performance in cash collection efficiency in 2023 compared to 2020.
- In 2019, the DSO was 18.86 days, which was slightly higher than in 2023, suggesting that the company has improved its cash collection efficiency over this period.

Overall, the increase in DSO from 2022 to 2023 raises concerns about the company's ability to efficiently collect payments from customers. It would be essential for Strategic Education Inc to closely monitor its accounts receivable management and implement strategies to streamline the collection process in order to maintain healthy cash flows and liquidity.