The TJX Companies Inc (TJX)

Days of sales outstanding (DSO)

		Feb 3, 2024	Oct 28, 2023	Jul 29, 2023	Apr 29, 2023	Jan 28, 2023	Oct 29, 2022	Jul 30, 2022	Apr 30, 2022	Jan 29, 2022	Oct 30, 2021	Jul 31, 2021	May 1, 2021	Jan 30, 2021	Oct 31, 2020	Aug 1, 2020	May 2, 2020	Feb 1, 2020	Nov 2, 2019	Aug 3, 2019	May 4, 2019
Receivables turnover		92.03	75.34	73.76	79.65	73.38	69.00	74.22	78.66	76.31	64.26	57.89	54.74	64.01	51.43	44.99	56.33	96.29	64.99	71.94	91.62
DSO	days	3.97	4.84	4.95	4.58	4.97	5.29	4.92	4.64	4.78	5.68	6.31	6.67	5.70	7.10	8.11	6.48	3.79	5.62	5.07	3.98

February 3, 2024 calculation

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

Days Sales Outstanding (DSO) is a financial ratio that indicates the average number of days it takes for a company to collect revenue after a sale is made. A lower DSO value is generally preferred as it signifies a faster collection of accounts receivable, which can improve cash flow and working capital efficiency.

Analyzing the DSO trend for The TJX Companies Inc over the past few quarters, we observe fluctuations in the metric. The DSO ranged from as low as 3.79 days to as high as 8.11 days during the period under review. Lower DSO values, such as 3.97 days and 3.98 days, indicate efficient accounts receivable management and an ability to swiftly convert sales into cash.

However, the company experienced higher DSO figures, such as 8.11 days, which may suggest delays in collecting receivables and potential liquidity challenges. It is important for TJX Companies Inc to closely monitor and manage its accounts receivable collection process to ensure timely payments from customers and maintain a healthy cash flow position.

In conclusion, while the DSO of TJX Companies Inc has shown variability over the analyzed period, the company should aim to sustain lower DSO levels to optimize its working capital and overall financial health.