Sterling Construction Company Inc (STRL)

The analysis of Sterling Construction Company Inc.'s Days of Sales Outstanding (DSO) over the specified period indicates considerable fluctuations with underlying trends worth noting. At the close of December 31, 2020, the DSO stood at approximately 83.03 days, suggesting that, on average, the company was taking about 83 days to collect receivables, which is relatively high and may point to extended credit terms or collection challenges.

By December 31, 2021, the DSO decreased to approximately 73.76 days, representing an improvement of about 9.27 days. This decline suggests that the company was able to collect receivables more efficiently or potentially tightened credit policies during that year.

In the subsequent year ending December 31, 2022, the DSO increased again to approximately 79.74 days, indicating a reversal of the improvement seen in 2021. This uptick may denote some collection delays or changes in customer credit operations, resulting in longer periods needed to convert receivables into cash.

The most notable improvement occurred between December 31, 2022, and December 31, 2023, when the DSO decreased to approximately 66.36 days. This represents a reduction of nearly 13.38 days and could be indicative of strategic efforts to accelerate collections, improved credit policies, or a shift in customer mix towards more prompt-paying clients.

By the end of December 31, 2024, the DSO further declined to approximately 58.71 days, standing at a level that reflects significantly more efficient receivables management compared to previous years. This sustained downward trend over the four-year period highlights ongoing efforts by the company to shorten the collection cycle and enhance cash flow. Overall, the trend demonstrates continuous improvement in receivables collection efficiency, which could positively impact liquidity and operational flexibility.

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Dec 31, 2024