UFP Technologies Inc (UFPT)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		6.18	6.80	5.24	6.77	6.90
DSO	days	59.09	53.66	69.70	53.94	52.89

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.18
= 59.09

The Days Sales Outstanding (DSO) ratio measures the average number of days it takes for a company to collect revenue after making a sale. A lower DSO indicates faster collections, which can improve cash flow and overall liquidity.

Analyzing the trend of UFP Technologies Inc's DSO over the past five years, we observe fluctuations in the collection period. In 2023, the DSO increased to 59.09 days from 53.66 days in 2022. This suggests that the company took longer to collect payments from customers in 2023 compared to the previous year.

Comparing the DSO to 2019 and 2020, where it was 53.94 days and 52.89 days, respectively, the company's collection efficiency deteriorated in 2021 and 2023. This could indicate potential issues with credit policies, a slowdown in collections, or changes in customer payment behavior.

Overall, UFP Technologies Inc should closely monitor its DSO and take necessary steps to improve collection efficiency to ensure a healthy cash flow position and timely receipt of revenues.