Essential Utilities Inc (WTRG)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		8.36	6.07	7.20	5.35	8.27
DSO	days	43.67	60.11	50.71	68.20	44.15

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 8.36
= 43.67

Essential Utilities Inc's Days of Sales Outstanding (DSO) measures the average number of days it takes for the company to collect revenue from its customers after making a sale. A lower DSO indicates a faster collection process, while a higher DSO suggests slower customer payments.

The trend in Essential Utilities Inc's DSO over the past five years shows some fluctuations. In 2023, the DSO decreased to 43.67 days from 60.11 days in 2022, indicating an improvement in the company's ability to collect payments more quickly. This may be a positive sign of efficient accounts receivable management and effective credit control policies.

Comparing the current DSO to 2021 and 2020 figures, where the DSO was 50.71 days and 68.20 days respectively, the downward trend suggests a more streamlined collection process over the years.

However, it is worth noting that the DSO in 2019 was lower at 44.15 days compared to the current year, indicating that the company was collecting payments slightly faster back then.

Overall, Essential Utilities Inc's decreasing trend in DSO reflects better management of accounts receivable, contributing to improved cash flow and potentially a healthier financial position.