Visteon Corp (VC)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		4.00	4.48	3.96	3.85	4.38
DSO	days	91.30	81.44	92.27	94.83	83.29

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.00
= 91.30

Days Sales Outstanding (DSO) is a crucial efficiency ratio that sheds light on how quickly a company collects its outstanding accounts receivable. A lower DSO typically indicates that a company is more efficient in collecting cash from customers, while a higher DSO may suggest potential issues with collections or credit terms.

Analyzing Visteon Corp.'s DSO over the past five years, we observe a fluctuating trend. In 2019, the DSO stood at 76.35 days, indicating that it took the company approximately 76 days to collect on its sales. This metric improved in 2020 to 84.37 days, which can be interpreted as a positive sign, as the company reduced its collection period. However, in 2021, the DSO decreased further to 83.85 days, followed by a significant improvement to 75.41 days in 2022. This suggests that Visteon Corp. became more efficient in collecting receivables during that period.

The most recent data for 2023 shows a DSO of 67.94 days, the lowest in the analyzed period. This implies that Visteon Corp. is collecting payments from customers at a faster pace compared to previous years, which could be indicative of effective credit management or tightened collection policies.

Overall, the downward trend in DSO over the past few years could indicate improved efficiency in accounts receivable management for Visteon Corp. It is essential for the company to sustain this trend to ensure healthy cash flow and working capital management.