Unifirst Corporation (UNF)
Days of sales outstanding (DSO)
| Feb 24, 2024 | Nov 25, 2023 | Aug 26, 2023 | Feb 25, 2023 | Nov 26, 2022 | Aug 27, 2022 | May 28, 2022 | Feb 26, 2022 | Nov 27, 2021 | Aug 28, 2021 | May 29, 2021 | Feb 27, 2021 | Nov 28, 2020 | Aug 29, 2020 | May 30, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 25, 2019 | Feb 23, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Receivables turnover | 8.11 | 7.74 | 8.03 | 7.66 | 7.56 | 8.04 | 8.09 | 8.03 | 8.00 | 8.78 | 8.95 | 8.69 | 8.52 | 9.48 | 9.30 | 8.91 | 8.46 | 8.92 | 8.70 | 8.57 | |
| DSO | days | 45.03 | 47.15 | 45.48 | 47.62 | 48.31 | 45.40 | 45.10 | 45.45 | 45.64 | 41.58 | 40.77 | 42.00 | 42.82 | 38.50 | 39.25 | 40.96 | 43.15 | 40.91 | 41.94 | 42.59 |
February 24, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 8.11
= 45.03
The Days Sales Outstanding (DSO) is a financial ratio that indicates the average number of days it takes for a company to collect payment after making a sale. A lower DSO value implies a shorter time for collecting receivables, which is generally favorable as it signifies efficient cash flow management.
Analyzing the historical DSO data of Unifirst Corporation from November 2019 to February 2024, we observe fluctuations in the DSO values over time. The trend shows some variability but seems to hover around the mid-40s range, indicating consistency in the company's collection efforts.
The company experienced a peak in DSO of 48.31 days in February 2020, followed by a general decline over the next few quarters, reaching a low of 38.50 days in August 2020. This downward trend suggests that Unifirst Corporation improved its accounts receivable collection efficiency during this period.
However, there was a subsequent increase in DSO towards the end of 2021 and into 2022, with values exceeding 45 days. This uptick may raise concerns about potential challenges in collecting receivables promptly and efficiently during this period.
It is essential for Unifirst Corporation to closely monitor its DSO metrics and continue to implement effective credit and collection policies to ensure timely cash inflows and optimal working capital management. By evaluating and possibly mitigating the factors contributing to extended credit terms, the company can strive for improved financial performance and stability in the long term.
Peer comparison
Feb 24, 2024