The AES Corporation (AES)

Cash conversion cycle

		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
Cash conversion cycle	days	-10.15	19.14	19.81	29.66	30.67	27.17	20.23	24.00	28.71	26.44	23.18	29.37	17.92	21.81	18.64	24.26	19.31	18.76	20.10	24.71

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 25.57 + 43.25 – 78.97
= -10.15

The cash conversion cycle of AES Corp. has shown fluctuating trends over the past eight quarters. In Q4 2023, the company had a negative cash conversion cycle of -12.49 days, indicating that AES Corp. was able to convert its investments in inventory and accounts receivable into cash before paying its accounts payable.

In the previous quarters of 2023, the cash conversion cycle increased, reaching a peak of 29.66 days in Q1 2023. This increase suggests that the company took longer to convert its investments into cash, which may indicate potential issues with managing working capital efficiently.

Comparing to the same quarters in 2022, the cash conversion cycle has generally been higher in 2023, indicating a potential deterioration in the company's ability to convert its assets into cash.

Overall, the varying cash conversion cycle figures for AES Corp. suggest fluctuations in the efficiency of the company's working capital management. It would be essential for AES Corp. to closely monitor and potentially improve its cash conversion cycle to ensure optimal utilization of resources and liquidity management.