United Parcel Service Inc (UPS)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 8.03 | 7.92 | 7.70 | 7.81 | 7.39 | |
| DSO | days | 45.43 | 46.06 | 47.41 | 46.75 | 49.38 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 8.03
= 45.43
Days of Sales Outstanding (DSO) is a metric used to evaluate how efficiently a company collects its accounts receivable. A lower DSO indicates that a company is collecting payments from customers more quickly, which is generally seen as a positive sign.
Looking at the trend for United Parcel Service, Inc. over the past five years, we observe a slight fluctuation in the DSO. The DSO has ranged from 45.01 days to 47.05 days during this period, showing relatively consistent performance in managing accounts receivable.
In 2023, the DSO decreased slightly to 45.01 days compared to 45.77 days in 2022. This reduction suggests that United Parcel Service, Inc. improved its efficiency in collecting payments from customers, which could be attributed to better credit policies, enhanced collection processes, or prompt customer payments.
Overall, the stable and slightly decreasing trend in DSO over the years indicates that United Parcel Service, Inc. has been effective in managing its accounts receivable and maintaining a healthy cash flow position. However, it is essential for the company to continuously monitor and optimize its collection practices to ensure timely receipt of payments and support sustainable growth.
See also:
United Parcel Service Inc Average Receivable Collection Period