Thermo Fisher Scientific Inc (TMO)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		5.04	5.45	4.76	5.52	5.69
DSO	days	72.45	66.98	76.76	66.13	64.18

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.04
= 72.45

Days Sales Outstanding (DSO) is a key metric used to assess how efficiently a company is managing its accounts receivable. It measures the average number of days it takes for a company to collect revenue after a sale is made.

Analyzing the trend in Thermo Fisher Scientific Inc.'s DSO over the past five years shows fluctuations. In 2019, the company had a DSO of 62.15 days, which increased slightly to 65.04 days in 2020. However, there was a significant jump in DSO in 2021 to 74.25 days, indicating that the company took longer to collect revenue from its customers.

The DSO improved in 2022 to 65.95 days, suggesting a more efficient collection process. This improvement continued in 2023, with a DSO of 70.02 days, still higher than the previous year but showing a positive trend.

It is important for Thermo Fisher Scientific Inc. to closely monitor and manage its DSO to ensure that it is collecting payments in a timely manner. A lower DSO generally indicates better liquidity and cash flow management, while a consistently high DSO may signify potential issues with credit policies or customer payment behaviors.