Viatris Inc (VTRS)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		5.46	5.01	4.74	3.07	4.36
DSO	days	66.81	72.80	77.02	118.90	83.79

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.46
= 66.81

To analyze Viatris Inc's Days Sales Outstanding (DSO) over the past five years:

1. Trend Analysis: The trend in DSO shows some fluctuations over the years. In 2020, the DSO spiked to 148.00 days, indicating a significant delay in collecting receivables compared to the other years. However, in recent years, DSO has been showing some improvement, with values ranging between 85.61 days in 2022 and 97.08 days in 2019.

2. Industry Comparison: To assess the efficiency of Viatris Inc in collecting receivables, it would be beneficial to compare its DSO with industry benchmarks. A DSO lower than the industry average may suggest better receivables management.

3. Impact on Cash Flow: A high DSO implies that the company takes longer to convert credit sales into cash, potentially restricting cash flow. Conversely, a decreasing trend in DSO indicates improved collections efficiency, leading to better cash flow management.

4. Customer Credit Policies: The DSO metric can also shed light on Viatris Inc's credit policies with customers. A longer DSO may indicate relaxed credit terms or creditworthiness issues with customers.

5. Seasonal Variations: It is worth considering if Viatris Inc experiences seasonal fluctuations in DSO. Understanding these patterns can help in better cash flow forecasting and working capital management.

In conclusion, the analysis of Viatris Inc's DSO reveals both challenges and improvements in receivables management over the past five years. Tracking DSO and understanding its implications can assist in making informed decisions regarding credit policies, cash flow optimization, and overall financial performance.