The AES Corporation (AES)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Inventory turnover 14.28 12.77 13.44 12.03 9.54 9.80 10.70 12.76 13.96 13.64 16.60 15.93 15.11 15.16 14.52 16.50 16.10 16.05 16.51 14.06
Receivables turnover 8.44 7.40 7.57 7.00 6.62 6.90 7.01 7.46 6.95 7.81 7.60 7.42 6.72 6.79 6.80 6.83 6.33 6.91 6.89 6.81
Payables turnover 4.62 6.21 6.57 6.90 5.82 5.80 5.53 6.82 7.31 7.76 7.79 8.54 6.03 6.51 6.06 7.12 5.98 6.42 6.63 6.65
Working capital turnover — — — 15.00 10.95 7.14 12.57 29.20 17.85 10.59 8.75 8.19 185.77 88.25 18.55 30.96 75.47 21.67 7.18 7.11

The activity ratios of AES Corp. provide insight into the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital.

1. Inventory Turnover: AES Corp. has shown a steady improvement in managing its inventory over the past eight quarters, with the ratio ranging from 9.54 to 14.28. This indicates that the company is able to sell and replace its inventory multiple times within a given period, showing efficient inventory management.

2. Receivables Turnover: The company's receivables turnover ratio has varied between 6.90 and 8.92 over the same period. A higher turnover ratio suggests that AES Corp. efficiently collects payments from its customers, translating receivables into cash quickly.

3. Payables Turnover: The payables turnover ratio for AES Corp. has fluctuated between 4.62 and 6.90. A higher turnover ratio indicates that the company is paying its suppliers more quickly, potentially benefiting from discounts and maintaining good relationships with vendors.

4. Working Capital Turnover: The working capital turnover ratio, which is a measure of how efficiently working capital is used to generate sales, was not available for the first three quarters of 2023 but was significant at 15.00 in Q1 2023. This implies that AES Corp. was able to generate significant sales relative to its working capital in that quarter.

Overall, the activity ratios of AES Corp. indicate that the company is effectively managing its inventory, receivables, payables, and working capital to support its operations and drive sales growth.

Average number of days

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 25.57 28.59 27.15 30.35 38.24 37.23 34.10 28.60 26.15 26.75 21.99 22.91 24.15 24.08 25.13 22.12 22.67 22.74 22.11 25.95
Days of sales outstanding (DSO) days 43.25 49.34 48.19 52.18 55.14 52.91 52.09 48.94 52.48 46.75 48.04 49.19 54.33 53.77 53.70 53.44 57.67 52.85 53.00 53.62
Number of days of payables days 78.97 58.80 55.53 52.86 62.71 62.98 65.96 53.54 49.92 47.06 46.85 42.73 60.56 56.04 60.19 51.29 61.04 56.83 55.02 54.86

Activity ratios are key metrics used to assess how effectively a company manages its assets. Let's analyze the activity ratios of AES Corp. based on the provided data:

1. Days of Inventory on Hand (DOH): This ratio measures how long, on average, it takes for AES Corp. to sell its inventory. A lower DOH indicates efficient inventory management. In Q4 2023, AES Corp. had 25.57 days of inventory on hand, showing an improvement from previous quarters (e.g., 38.24 days in Q4 2022). This implies that the company is managing its inventory more effectively.

2. Days of Sales Outstanding (DSO): DSO reflects the average number of days it takes AES Corp. to collect payments from its customers. A lower DSO suggests efficient accounts receivable management. The DSO has decreased from 52.04 days in Q4 2022 to 40.91 days in Q4 2023, indicating that AES Corp. is collecting payments more promptly.

3. Number of Days of Payables: This ratio indicates how long AES Corp. takes to pay its suppliers. A higher number of days of payables suggests that the company is taking longer to settle its payables. In Q4 2023, the number of days of payables was 78.97, significantly higher compared to previous quarters. This suggests that AES Corp. is taking longer to pay its suppliers, which could offer improved cash flow flexibility.

Overall, based on the activity ratios analysis, AES Corp. has shown improvements in inventory management and accounts receivable collection efficiency, while also potentially benefiting from extended payment terms with suppliers. It is important for investors and stakeholders to monitor these ratios to understand how the company is utilizing its assets to generate revenue.

Long-term

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Fixed asset turnover 0.42 0.46 0.50 0.54 0.55 0.57 0.57 0.56 0.56 0.48 0.46 0.44 0.42 0.43 0.42 0.44 0.45 0.47 0.49 0.50
Total asset turnover 0.28 0.30 0.31 0.33 0.33 0.33 0.33 0.33 0.34 0.31 0.30 0.28 0.28 0.28 0.28 0.29 0.30 0.31 0.32 0.32

The fixed asset turnover ratio of AES Corp. has shown a declining trend from Q1 2022 to Q4 2023, indicating that the company is generating lower revenues relative to its fixed assets over this period. This could suggest inefficiency in utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover ratio has remained relatively stable around 0.33 from Q1 2022 to Q4 2023. This ratio reflects how efficiently AES Corp. is using all its assets to generate revenue. While the total asset turnover ratio is lower than the fixed asset turnover ratio, it indicates a consistent level of efficiency in generating sales compared to all assets held by the company.

Overall, the declining trend in fixed asset turnover may raise concerns about the company's management of fixed assets to generate revenue, while the stable total asset turnover indicates consistent efficiency in utilizing all assets to drive sales.