Walgreens Boots Alliance Inc (WBA)

Days of Sales Outstanding (DSO) indicates the average number of days it takes for a company to collect payments after making a sale. A lower DSO is generally preferable as it suggests faster cash conversion and efficient management of accounts receivable.

Looking at the DSO trend for Walgreens Boots Alliance Inc, we see a consistent improvement in collection efficiency over the past five years. In 2019, the DSO stood at 19.27 days, which decreased to 18.66 days in 2020, further declining to 15.60 days in 2021, and then to 13.80 days in 2022. In the most recent period of August 31, 2023, the DSO reached its lowest point at 14.12 days, showcasing a steady and positive trend in the company's collection process.

The decreasing trend in DSO indicates that Walgreens Boots Alliance Inc has been able to collect payments from its customers at a faster pace, signaling improved credit and collection policies, more effective management of accounts receivable, or a shift towards a customer base with quicker payment cycles.

This reduction in DSO could suggest enhanced working capital management, as the company is converting sales into cash more rapidly, which in turn may lead to increased liquidity and reduced dependence on external financing.

Overall, the declining trend in DSO for Walgreens Boots Alliance Inc demonstrates an improvement in the efficiency of its accounts receivable management and a positive impact on its cash flow and liquidity position.

Peer comparison

Aug 31, 2023

See also:

Walgreens Boots Alliance Inc Average Receivable Collection Period