Waters Corporation (WAT)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		4.05	4.00	4.47	4.03	4.00
DSO	days	90.17	91.23	81.73	90.62	91.33

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.05
= 90.17

The days of sales outstanding (DSO) ratio for Waters Corp. over the past five years ranged from 80.27 days in 2021 to 89.14 days in 2019. This ratio indicates the average number of days it takes for the company to collect revenue from its credit sales.

A decreasing trend in DSO over the years suggests that Waters Corp. has been collecting its accounts receivable more efficiently. The lower DSO in 2021 compared to 2020 indicates an improvement in the company's receivables management practices, potentially leading to better cash flow and liquidity.

However, the slight increase in DSO in 2023 compared to 2022 may raise some concerns about the company's ability to collect receivables promptly. It is essential for Waters Corp. to monitor and manage its accounts receivable effectively to ensure timely collection and maintain a healthy cash conversion cycle.

Overall, while the DSO ratio for Waters Corp. has fluctuated over the years, indicating varying levels of efficiency in collecting receivables, it is crucial for the company to focus on maintaining a consistent and optimal level of DSO to support its financial health and operational effectiveness.