Timken Company (TKR)

Days of Sales Outstanding (DSO) is a key metric used to evaluate the efficiency of a company's accounts receivable management. It indicates the average number of days it takes for a company to collect payment after making a sale. Lower DSO values are generally favorable as they indicate faster collections and better liquidity.

Looking at the trend in Timken Co.'s DSO over the past five years, we observe some fluctuations. In 2023, the DSO decreased to 62.47 days from 65.22 days in 2022, signaling an improvement in the company's accounts receivable collection efficiency. This reduction may be attributed to more effective credit control measures or prompt payment from customers.

Comparing the 2023 DSO to earlier years, we notice that it is lower than the 2021 and 2019 figures but higher than the 2020 DSO. This suggests that Timken Co. has managed to maintain a relatively stable DSO performance over the past five years, with some variations depending on specific factors like economic conditions or changes in customer behavior.

Overall, the downward trend in Timken Co.'s DSO in 2023 reflects positively on the company's ability to efficiently convert credit sales into cash. It indicates effective accounts receivable management practices that contribute to improved liquidity and financial stability. Continued monitoring of DSO trends will be essential to ensure ongoing efficiency in the company's collections process.

Peer comparison

Dec 31, 2023