Cactus Inc (WHD)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 4.70 | 4.00 | 3.87 | 6.63 | 5.64 | |
| DSO | days | 77.69 | 91.28 | 94.40 | 55.07 | 64.72 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.70
= 77.69
To analyze Cactus Inc's Days of Sales Outstanding (DSO) trend over the past five years, we calculate the number of days it takes the company to collect its accounts receivable. A lower DSO indicates a faster collection of receivables, which is generally a positive sign for liquidity and efficient cash flow management.
In 2023, Cactus Inc's DSO was 77.69 days, showing an improvement from the prior year's 91.28 days. This reduction suggests the company has been more effective in converting its credit sales into cash during the year.
Comparing further back, the DSO for 2023 is also lower than that of 2021 (94.40 days) and 2019 (64.72 days). This indicates a positive trend in managing accounts receivable over the years, possibly due to stronger credit policies, better collection practices, or improved customer payment behavior.
However, it's worth noting that the DSO for 2023 is higher than the exceptionally low 55.07 days reported in 2020. This increase may warrant further investigation to understand any specific factors affecting the collection period during the year.
Overall, Cactus Inc's DSO trend demonstrates a general improvement in receivables management efficiency over the past five years, which can positively impact the company's working capital and cash flow position.
Peer comparison
Dec 31, 2023