Zurn Elkay Water Solutions Corporation (ZWS)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Mar 31, 2020 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 6.74 | 5.39 | 5.14 | 6.18 | 6.07 | |
| DSO | days | 54.18 | 67.77 | 71.00 | 59.07 | 60.08 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.74
= 54.18
The days of sales outstanding (DSO) for Zurn Elkay Water Solutions Corporation have exhibited fluctuations over the past five years. In 2023, the DSO decreased to 54.18 days from 67.77 days in 2022, indicating an improvement in the efficiency of collecting accounts receivable. This reduction may imply a more effective credit and collections process that has led to a quicker conversion of sales into cash.
Comparing 2023 to 2021, where the DSO was 71.00 days, there has been a significant enhancement in the collection period, suggesting better management of receivables and potentially improved cash flow. The downward trend in DSO from 2021 to 2023 could highlight the company's efforts to streamline its accounts receivable processes and strengthen customer credit policies.
However, it is worth noting that the DSO in 2020 (59.07 days) and 2019 (60.08 days) was lower than in 2023. This may indicate that Zurn Elkay Water Solutions Corporation had previously exhibited even greater efficiency in collecting receivables. It could be beneficial for the company to analyze the reasons behind the increase in DSO from 2020 to 2023 to identify any factors that may be affecting its accounts receivable turnover.
Overall, the decreasing trend in DSO from 2021 to 2023 is a positive sign of improved liquidity and cash flow management for Zurn Elkay Water Solutions Corporation, but it is essential for the company to continue monitoring and managing its accounts receivable effectively to maintain favorable DSO levels in the future.
Peer comparison
Dec 31, 2023