Teradyne Inc (TER)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		6.34	6.42	6.72	6.27	6.33
DSO	days	57.57	56.82	54.29	58.17	57.63

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.34
= 57.57

The days of sales outstanding (DSO) for Teradyne, Inc. have shown slight fluctuations over the past five years. In 2023, the DSO stands at 57.57 days, slightly higher compared to 2022 when it was 56.82 days. This indicates that on average, it takes Teradyne 57.57 days to collect its accounts receivable from customers in 2023.

Comparing the DSO to previous years, the DSO was lowest in 2021 at 54.29 days and highest in 2020 at 58.17 days. Despite the fluctuations, the general trend over the five-year period suggests that Teradyne has been relatively consistent in managing its accounts receivable collection efficiency.

Analyzing the DSO can provide insights into the company's credit policies, customer payment behavior, and efficiency of its account receivable management processes. A lower DSO typically indicates that the company is collecting its receivables more quickly, which can improve liquidity and cash flow. On the other hand, a higher DSO could signal potential issues with credit policies or difficulties in collecting payments from customers.

Overall, the DSO trend for Teradyne, Inc. suggests a relatively stable accounts receivable management performance over the past five years, with slight variations in collection efficiency. Further analysis in conjunction with other financial ratios and industry benchmarks can provide a more comprehensive assessment of the company's overall financial health.