The TJX Companies Inc (TJX)

Days of sales outstanding (DSO)

		Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020
Receivables turnover		92.03	73.38	76.31	63.43	96.20
DSO	days	3.97	4.97	4.78	5.75	3.79

February 3, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 92.03
= 3.97

The days of sales outstanding (DSO) is a measure of how quickly a company collects its accounts receivable, indicating the efficiency of its credit and collection policies.

Analyzing the trend in DSO for The TJX Companies Inc over the past five years, we observe a fluctuating pattern. In the latest fiscal year ending February 3, 2024, the DSO decreased to 3.97 days from 4.97 days in the previous year. This decline suggests that the company has improved its accounts receivable collection process, possibly by tightening credit terms or becoming more efficient in collecting payments from customers.

Comparing the current DSO of 3.97 days to the historical trend, it is lower than the DSO reported in the fiscal years 2023 and 2021 but slightly higher than 2020. This indicates that TJX has managed to reduce the average number of days it takes to collect payments from customers in the most recent fiscal year, which is a positive sign of efficiency in managing its accounts receivable.

Overall, the decreasing trend in DSO over the years signals that The TJX Companies Inc has been more effective in managing its accounts receivable and improving its cash flow position by collecting payments from customers more swiftly. It also suggests that the company may have enhanced its credit control policies or implemented more efficient collection processes.