Timken Company (TKR)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Receivables turnover | 6.99 | 6.63 | 5.77 | 6.04 | 6.35 | 5.94 | 5.65 | 5.63 | 6.53 | 5.67 | 5.43 | 5.00 | 5.95 | 6.06 | 6.43 | 6.37 | 6.85 | 6.84 | 6.31 | 5.95 | |
| DSO | days | 52.24 | 55.06 | 63.25 | 60.46 | 57.46 | 61.44 | 64.57 | 64.85 | 55.93 | 64.34 | 67.17 | 72.93 | 61.31 | 60.22 | 56.78 | 57.33 | 53.25 | 53.37 | 57.83 | 61.33 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.99
= 52.24
Days of Sales Outstanding (DSO) is a key ratio that measures the average number of days it takes for a company to collect revenue after a sale is made. A low DSO indicates that the company is efficient in collecting payments from customers, while a high DSO may suggest potential issues with accounts receivable management.
Analyzing the DSO trend for Timken Co. over the past eight quarters, we observe fluctuations in the collection period. In Q4 2023, the DSO decreased to 62.47 days from 64.61 days in Q3 2023, which is a positive sign as it indicates Timken Co. may have improved its collection efficiency during this period.
Comparing Q4 2023 to the same quarter in the previous year, the DSO decreased from 65.22 days in Q4 2022 to 62.47 days in Q4 2023, indicating a year-over-year improvement. This suggests that Timken Co. may have implemented better accounts receivable practices or have experienced faster payment collections from customers.
However, it is essential to note that the DSO has shown some variability over the past quarters, reaching as high as 72.92 days in Q2 2022. This suggests that Timken Co. may face challenges in managing its receivables efficiently at times.
Overall, while there have been fluctuations in Timken Co.'s DSO over the analyzed period, the recent decrease in Q4 2023 is a positive indicator of potentially improved accounts receivable management. Monitoring this ratio over time and comparing it to industry benchmarks can provide valuable insights into the company's financial health and operational efficiency.
Peer comparison
Dec 31, 2023