Trane Technologies plc (TT)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 5.89 | 5.67 | 5.72 | 5.54 | 7.48 | |
| DSO | days | 61.94 | 64.43 | 63.83 | 65.90 | 48.79 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.89
= 61.94
Trane Technologies plc's Days of Sales Outstanding (DSO) have shown a fluctuating trend over the past five years, with values ranging from 61.05 days in 2023 to 64.54 days in 2020. This metric indicates the average number of days it takes for the company to collect revenue from its customers after making a sale. Lower DSO values generally suggest more efficient management of accounts receivable and quicker cash conversion, while higher values may indicate delays in collecting payments.
The DSO for Trane Technologies plc decreased in 2023 compared to the previous year, which could imply improved receivables management or prompt collections from customers. However, it is important to consider industry standards and peer comparisons to gain a more comprehensive understanding of the company's performance in this area. Monitoring DSO over time can help assess the effectiveness of the company's credit policies, collection procedures, and overall financial health.