Tidewater Inc (TDW)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		290.25	—	—	5.34	3.75
DSO	days	1.26	—	—	68.41	97.30

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 290.25
= 1.26

To analyze Tidewater Inc's days of sales outstanding (DSO) based on the provided data, we observe a significant improvement in the company's collection efficiency over the years. In 2019, the DSO was notably high at 97.30 days, indicating that it took the company nearly 97 days to collect its accounts receivable on average.

However, in the subsequent years, there was a remarkable reduction in DSO. By the end of 2020, the DSO dropped to 68.41 days, showing an improvement in the company's accounts receivable collection process. Notably, in 2023, the DSO reached an impressively low level of 1.26 days, reflecting a substantial enhancement in the efficiency of collecting outstanding sales revenue.

The declining trend in DSO over the years suggests that Tidewater Inc has been effectively managing its receivables and swiftly converting sales into cash, which is a positive signal for the company's liquidity and operational performance. A lower DSO indicates that the company is able to collect its accounts receivable more promptly, leading to improved cash flows and potentially lower credit risk exposure.

It is essential for the company to sustain this momentum in reducing DSO to ensure continued efficiency in managing its working capital and maintaining a healthy cash flow position. Overall, the improving trend in days of sales outstanding reflects positively on Tidewater Inc's financial management and operational effectiveness in managing its receivables.