Xylem Inc (XYL)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 4.55 | 5.04 | 5.45 | 5.28 | 5.07 | |
| DSO | days | 80.15 | 72.44 | 66.96 | 69.09 | 72.04 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.55
= 80.15
Days Sales Outstanding (DSO) is a crucial metric that reflects the average number of days it takes for a company to collect payment after making a sale. A higher DSO indicates slower cash collection, potentially pointing to inefficiencies in accounts receivable management or potential credit risks.
Analyzing Xylem Inc's DSO over the past five years, we observe a general trend of fluctuation. The DSO increased from 72.04 days in 2019 to 69.09 days in 2020, before peaking at 80.15 days in 2023. This upward trend may indicate a lengthening of the collection period, potentially impacting cash flow and liquidity.
Comparing Xylem Inc's DSO to industry benchmarks or historical data, further insight can be gained into the effectiveness of the company's credit policies and collections processes. A high DSO relative to competitors may suggest room for improvement in managing receivables.
It is advisable for Xylem Inc to closely monitor and analyze DSO trends, implement strategies to shorten the collection period, such as improving credit terms or enhancing collections efforts, to optimize working capital and enhance financial performance in the long run.
Peer comparison
Dec 31, 2023