Thermo Fisher Scientific Inc (TMO)

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		5.04	5.05	5.30	—	5.45	—	—	—	4.76	—	—	—	—	—	—	—	—	—	—	—
DSO	days	72.45	72.34	68.84	—	66.98	—	—	—	76.76	—	—	—	—	—	—	—	—	—	—	—

December 31, 2023 calculation

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

To analyze Thermo Fisher Scientific Inc.'s days of sales outstanding (DSO) trend, we observe fluctuations in the DSO metric over the past eight quarters. The DSO measures the average number of days it takes for a company to collect revenue after a sale is made. A higher DSO can indicate inefficiencies in accounts receivable management and potential cash flow challenges.

Looking at the data provided, we note a gradual increase in DSO from Q1 2022 to Q4 2023, with some minor fluctuations in between. The DSO increased from 65.95 days in Q4 2022 to 70.36 days in Q3 2023, before slightly decreasing to 70.02 days in Q4 2023. This suggests a potential delay in collecting revenue from customers, which could impact the company's cash flow and working capital management.

The DSO trend observed in the data indicates a need for Thermo Fisher Scientific Inc. to focus on optimizing its accounts receivable processes to reduce the time taken to convert credit sales into cash. By implementing efficient credit policies, monitoring customer payments closely, and enhancing collections processes, the company may be able to lower its DSO and improve its overall financial performance.

Investors and stakeholders should monitor Thermo Fisher Scientific Inc.'s DSO closely in future quarters to assess the effectiveness of the company's efforts to manage its accounts receivable efficiently and maintain a healthy cash flow position.