TripAdvisor Inc (TRIP)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		9.08	8.39	5.57	4.73	8.83
DSO	days	40.18	43.49	65.51	77.11	41.34

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 9.08
= 40.18

Days Sales Outstanding (DSO) is a financial ratio that measures the average number of days a company takes to collect revenue after a sale is made. A lower DSO indicates that the company is collecting its accounts receivable faster, which is generally favorable.

Analyzing TripAdvisor Inc.'s DSO over the past five years, we observe fluctuations in the metric. In 2019, the DSO stood at 42.82 days, indicating efficient account receivable management. However, in 2020, there was a significant increase to 80.37 days, suggesting a longer collection period, possibly due to economic conditions or changes in credit policies.

In 2021, the DSO further increased to 77.29 days, reflecting continued challenges in collecting revenue promptly. The trend reversed in 2022, with a decrease to 50.15 days, possibly indicating improved collection efforts or changes in the customer base.

The most recent data for 2023 shows a decrease in DSO to 39.19 days, signaling a positive development in collecting sales revenue more efficiently. This reduction could be attributed to enhanced collection practices or a more favorable credit environment.

Overall, while there have been fluctuations in TripAdvisor Inc.'s DSO over the past five years, the downward trend in 2023 suggests a potential improvement in the company's accounts receivable management and liquidity position. It will be crucial to monitor future trends in DSO to assess the effectiveness of the company's efforts in managing its receivables.