West Pharmaceutical Services Inc (WST)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 5.70 | 5.69 | 5.79 | 5.57 | 5.76 | |
| DSO | days | 64.03 | 64.15 | 63.03 | 65.51 | 63.34 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.70
= 64.03
The Days Sales Outstanding (DSO) is a key financial ratio that measures how long it takes for a company to collect its accounts receivable. Lower DSO indicates faster collection of receivables, which can be a sign of efficient cash flow management and effective credit policies.
West Pharmaceutical Services, Inc.'s DSO has been relatively stable over the past five years, ranging from 63.03 days to 65.51 days. This suggests that the company has been consistent in managing its accounts receivable and collecting payments from customers within a similar timeframe.
It is essential to note that a DSO that is too high may indicate potential issues with the company's credit policies, collection process, or the creditworthiness of customers. Conversely, a DSO that is too low could imply overly aggressive collection practices that may deter customers.
Considering West Pharmaceutical Services, Inc.'s DSO trend over the years, the company appears to have maintained a moderate DSO level, indicating a balanced approach to managing accounts receivable and ensuring a steady cash flow position.
Peer comparison
Dec 31, 2023