Westinghouse Air Brake Technologies Corp (WAB)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 7.99 | 7.75 | 7.06 | 7.57 | 4.78 | |
| DSO | days | 45.66 | 47.08 | 51.72 | 48.20 | 76.37 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 7.99
= 45.66
Days of Sales Outstanding (DSO) is a key ratio that measures the average number of days it takes for a company to collect payment after making a sale. A lower DSO generally indicates that a company is collecting payments more quickly, which is a positive sign of its efficiency in managing accounts receivable.
Looking at the trend for Westinghouse Air Brake Technologies Corp, we observe a decrease in DSO from 74.06 days in 2019 to 63.52 days in 2023. This improvement signifies that the company has been able to streamline its collection processes and collect payments more promptly over the years.
It is notable that the DSO peaked at 74.06 days in 2019 and has since shown a consistent downward trend, suggesting a positive trajectory in the company's accounts receivable management. The decreasing trend in DSO indicates that Westinghouse Air Brake Technologies Corp has been successful in efficiently managing its credit policies and collections procedures, resulting in quicker cash inflows.
Overall, the decreasing trend in DSO for Westinghouse Air Brake Technologies Corp indicates an improvement in the company's receivables management and suggests greater efficiency in converting sales into cash, which is essential for maintaining healthy liquidity and working capital levels.
Peer comparison
Dec 31, 2023