The AES Corporation (AES)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 21.72 | 25.57 | 38.24 | 26.15 | 24.15 |
| Days of sales outstanding (DSO) | days | 51.46 | 43.25 | 55.14 | 52.48 | 54.33 |
| Number of days of payables | days | 60.59 | 78.97 | 62.71 | 49.92 | 60.56 |
| Cash conversion cycle | days | 12.59 | -10.15 | 30.67 | 28.71 | 17.92 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 21.72 + 51.46 – 60.59
= 12.59
The cash conversion cycle of The AES Corporation has displayed fluctuations over the past five years.
- In 2020, the company had a cash conversion cycle of 17.92 days, indicating that it took approximately 18 days for the company to convert its investments in inventory and other resources into cash inflows from sales.
- By the end of 2021, the cash conversion cycle increased to 28.71 days, suggesting a delay in the company's ability to convert its resources into cash.
- In 2022, the cash conversion cycle further extended to 30.67 days, indicating a prolonged period for the company to receive cash from its operational activities.
- Unexpectedly, by the end of 2023, the cash conversion cycle turned negative at -10.15 days, suggesting that the company was able to convert its resources into cash faster than the cycle duration.
- In 2024, the cash conversion cycle improved to 12.59 days, showing a quicker pace in converting investments into cash compared to the previous year.
Overall, the trend in The AES Corporation's cash conversion cycle indicates variations in the efficiency of its working capital management and the effectiveness of its operational processes.