Watsco Inc (WSO)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 9.13 | 9.74 | 8.99 | 9.44 | 8.94 | |
| DSO | days | 39.98 | 37.49 | 40.59 | 38.65 | 40.84 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 9.13
= 39.98
To analyze Watsco Inc.'s days of sales outstanding (DSO) over the past five years, we observe a fluctuating trend.
In 2019, the DSO stood at 40.84 days, indicating that, on average, it took the company approximately 40.84 days to collect its accounts receivable.
In 2020, there was a slight improvement as the DSO decreased to 38.65 days, suggesting a more efficient accounts receivable collection process.
However, in 2021, the DSO increased to 40.59 days, showing a reversal in the efficiency trend and a lengthening in the collection period.
In 2022, Watsco Inc. managed to bring down its DSO to 37.49 days, indicating a considerable improvement in collecting outstanding payments.
By the end of 2023, the DSO increased slightly to 39.98 days, continuing its trend of fluctuation over the years.
Overall, Watsco Inc.'s DSO has shown variability, with improvements in some years and setbacks in others. It is important for the company to focus on maintaining a healthy balance between collecting receivables promptly to ensure steady cash flow and sustaining good relationships with customers.