UnitedHealth Group Incorporated (UNH)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		9.54	10.65	10.24	10.12	11.28
DSO	days	38.28	34.29	35.64	36.06	32.35

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 9.54
= 38.28

Unitedhealth Group Inc's Days Sales Outstanding (DSO) is a key ratio that measures the average number of days it takes for the company to collect revenue after making a sale. A lower DSO indicates that the company is able to efficiently collect payments from customers, thereby improving its cash flow and liquidity position.

Analyzing the trend of Unitedhealth's DSO over the past five years, we observe fluctuations in the metric. In 2019, the DSO was at its lowest point at 32.35 days, showing that the company had a strong ability to collect revenue quickly. However, in the following years, the DSO increased, with the metric peaking at 38.28 days in 2023.

The increase in DSO from 2019 to 2023 suggests a potential deterioration in Unitedhealth's accounts receivable management efficiency. An increasing DSO could indicate that the company is facing challenges in collecting payments from customers promptly, which could lead to prolonged cash conversion cycles and potential liquidity issues.

It is essential for Unitedhealth Group Inc to closely monitor its DSO and take proactive measures to improve its accounts receivable management processes. By implementing strategies to expedite the collection of outstanding invoices and manage credit risks effectively, the company can enhance its cash flow and overall financial performance.