Olympic Steel Inc (ZEUS)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 11.29 | 11.66 | 8.15 | 8.13 | 11.82 | |
| DSO | days | 32.33 | 31.31 | 44.80 | 44.91 | 30.87 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 11.29
= 32.33
The days of sales outstanding (DSO) is a crucial metric used to evaluate the efficiency of a company in collecting its accounts receivable. A lower DSO indicates that the company is collecting payments from customers more quickly, while a higher DSO suggests delays in collecting payments.
Analyzing the DSO trend for Olympic Steel Inc. over the past five years, we observe fluctuations in the collection period. The DSO was 32.33 days at the end of 2023, a slight increase from 31.34 days in 2022. This indicates that the company took slightly longer to collect its accounts receivable in 2023 compared to the previous year.
In 2021, the DSO significantly increased to 44.92 days, possibly indicating challenges in collecting payments promptly. A similar trend was evident in 2020, with a DSO of 44.84 days. However, in 2019, the DSO was notably lower at 30.88 days, suggesting more efficient collections that year.
It is essential for Olympic Steel Inc. to closely monitor its DSO and strive to improve collection efficiency to ensure a healthy cash flow. Analyzing the underlying reasons for fluctuations in DSO can help the company implement strategies to shorten the collection period and optimize its working capital management.
Peer comparison
Dec 31, 2023