Trane Technologies plc (TT)
Days of sales outstanding (DSO)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 6.41 | 5.89 | 5.67 | 5.72 | 5.54 | |
| DSO | days | 56.93 | 61.94 | 64.43 | 63.83 | 65.90 |
December 31, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.41
= 56.93
Trane Technologies plc has shown a consistent trend of decreasing days of sales outstanding (DSO) over the past five years. The DSO decreased from 65.90 days as of December 31, 2020, to 56.93 days as of December 31, 2024. This indicates that the company has been able to collect its accounts receivable more efficiently over this period.
A lower DSO is generally a positive sign, as it implies that the company is able to convert its sales into cash faster, which can improve cash flow and liquidity. Trane Technologies plc's decreasing DSO trend suggests that the company has been successful in managing its accounts receivable and ensuring timely collection from customers.
Overall, the declining DSO for Trane Technologies plc demonstrates an improvement in its receivables management efficiency, which can have a positive impact on the company's overall financial health and performance.