Advanced Drainage Systems Inc (WMS)
Days of sales outstanding (DSO)
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Receivables turnover | 8.92 | 11.84 | 8.07 | 8.61 | 10.01 | 12.93 | 8.23 | 7.05 | 8.11 | 8.36 | 6.37 | 7.05 | 8.38 | 10.10 | 6.97 | 7.30 | 8.36 | 10.02 | 5.98 | 6.08 | |
| DSO | days | 40.94 | 30.82 | 45.23 | 42.37 | 36.47 | 28.23 | 44.33 | 51.75 | 44.99 | 43.68 | 57.26 | 51.75 | 43.57 | 36.14 | 52.35 | 50.00 | 43.66 | 36.41 | 61.01 | 59.99 |
March 31, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 8.92
= 40.94
The Days Sales Outstanding (DSO) ratio for Advanced Drainage Systems Inc has varied over the past few quarters, ranging from a low of 28.23 days to a high of 61.01 days. DSO measures the average number of days it takes for a company to collect payment after making a sale.
A lower DSO indicates a shorter collection period, which can be favorable as it signifies efficient accounts receivable management and prompt cash flow generation. Conversely, a higher DSO suggests a longer time to collect payments, which may signal potential liquidity challenges or issues with credit and collection policies.
Analyzing the trend, we observe fluctuations in DSO over the quarters, indicating some inconsistency in the company's collection efficiency. The company experienced a decrease in DSO in the most recent quarter compared to the previous quarter, which may signal an improvement in accounts receivable management. However, it's essential for Advanced Drainage Systems Inc to maintain a consistent and ideally decreasing trend in DSO to ensure optimal cash flow and financial health.