Treehouse Foods Inc (THS)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 19.54 | 21.75 | 19.47 | 9.70 | 15.85 | |
| DSO | days | 18.68 | 16.78 | 18.75 | 37.64 | 23.03 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 19.54
= 18.68
Treehouse Foods Inc's Days of Sales Outstanding (DSO) measures the average number of days it takes for the company to collect payment from its customers after a sale is made. A lower DSO indicates that the company is able to collect payments more quickly, which is generally a positive sign of efficient cash flow management.
From 2019 to 2023, Treehouse Foods Inc's DSO has shown some fluctuations. In 2019, the DSO was 23.03 days, which decreased to 25.91 days in 2020. However, there has been a positive trend since then, with DSO improving to 17.64 days in 2021, 16.78 days in 2022, and further to 18.68 days in 2023. This trend suggests that the company has been managing its receivables more effectively in recent years.
A lower DSO generally indicates that Treehouse Foods Inc is able to convert its accounts receivable into cash more quickly, which can positively impact the company's liquidity and working capital position. It also indicates that the company has efficient credit and collection policies in place, allowing it to maintain a healthy cash flow cycle.
Overall, the improving trend in Days of Sales Outstanding for Treehouse Foods Inc from 2019 to 2023 is a positive indicator of the company's efficiency in managing its accounts receivable and cash flow.
Peer comparison
Dec 31, 2023