Will United Parcel Service's Next Quarter be a Bomb? - Motley Fool
I often use accounts receivable (AR) and days sales outstanding (DSO) to judge a company's current health and future prospects. It's an important step in separating the pretenders from the market's best stocks. Alone, AR -- the amount of money owed the company -- and DSO -- days worth of sales owed to the company -- don't tell you much. However, by considering the trends in AR and DSO, you can sometimes get a window onto the future.
Differences in business models can generate variations in DSO, so don't consider this the final word -- just a way to add some context to the numbers. But let's get back to our original question: Will United Parcel Service miss its numbers in the next quarter or two?
I don't think so. AR and DSO look healthy. For the last fully reported fiscal quarter, United Parcel Service's year-over-year revenue grew 12.7%, and its AR grew 11.8%. That looks OK. End-of-quarter DSO decreased 0.8% from the prior-year quarter. It was down 2.2% versus the prior quarter. Still, I'm no fortuneteller, and these are just numbers. Investors putting their money on the line always need to dig into the filings for the root causes and draw their own conclusions.
I often use accounts receivable (AR) and days sales outstanding (DSO) to judge a company's current health and future prospects. It's an important step in separating the pretenders from the market's best stocks. Alone, AR -- the amount of money owed the company -- and DSO -- days worth of sales owed to the company -- don't tell you much. However, by considering the trends in AR and DSO, you can sometimes get a window onto the future.
Differences in business models can generate variations in DSO, so don't consider this the final word -- just a way to add some context to the numbers. But let's get back to our original question: Will United Parcel Service miss its numbers in the next quarter or two?
I don't think so. AR and DSO look healthy. For the last fully reported fiscal quarter, United Parcel Service's year-over-year revenue grew 12.7%, and its AR grew 11.8%. That looks OK. End-of-quarter DSO decreased 0.8% from the prior-year quarter. It was down 2.2% versus the prior quarter. Still, I'm no fortuneteller, and these are just numbers. Investors putting their money on the line always need to dig into the filings for the root causes and draw their own conclusions.
