Constellation Energy Corp (CEG)

Short-term

Turnover ratios

The activity ratios of Constellation Energy Corporation provide insights into how effectively the company manages its assets and liabilities to generate revenue.

1. Inventory turnover: The company has consistently reported an inventory turnover of 0.00 over the past five quarters. This suggests that Constellation Energy Corporation may have minimal inventory levels, which could indicate efficient inventory management or a business model that does not heavily rely on maintaining large inventories.

2. Receivables turnover: The receivables turnover ratio has shown fluctuations over the quarters, ranging from 7.37 to 13.52. A higher receivables turnover ratio indicates that the company is efficient in collecting payments from customers, translating sales into cash quickly. The observed variability may indicate changes in credit policies or customer payment behaviors.

3. Payables turnover: The data shows that payables turnover was not reported in Q3 2023 and was 0.00 in other quarters. This could suggest that the company may not rely heavily on trade credit from suppliers, or it may negotiate favorable payment terms that do not require frequent payments.

4. Working capital turnover: The working capital turnover ratio has varied significantly, with values ranging from 5.70 to 16.07. A higher working capital turnover ratio indicates efficient utilization of working capital to generate revenue. The fluctuations in this ratio may reflect changes in operational efficiency or shifts in the company's working capital management strategies.

Overall, analyzing these activity ratios provides valuable insights into Constellation Energy Corporation's operational efficiency, asset management practices, and effectiveness in managing its accounts receivable and payable.

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Average number of days

Based on the provided data regarding Constellation Energy Corporation's activity ratios, we can see fluctuations in the Days of Sales Outstanding (DSO) metric over the past five quarters.

In Q4 2022, the DSO was high at 49.52 days, indicating that, on average, it took the company almost 50 days to collect payment from its customers. This number decreased significantly in Q2 2023 to 26.99 days, suggesting improved efficiency in collecting receivables. However, the DSO increased again in Q4 2023 to 41.76 days.

On the other hand, data regarding Days of Inventory on Hand (DOH) and Number of Days of Payables are missing, which limits a comprehensive analysis of the company's inventory management and payment terms with suppliers.

The upward trend in DSO from Q2 2023 to Q4 2023 could indicate potential challenges in managing accounts receivable efficiently, which could impact the company's working capital and cash flow. Monitoring and managing DSO effectively is crucial for ensuring a healthy liquidity position and optimizing cash flow operations.

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Long-term

Constellation Energy Corporation's long-term activity ratios reveal insights into the company's efficiency in utilizing its fixed assets and total assets.

The fixed asset turnover ratio shows a decreasing trend over the five quarters, declining from 1.23 in Q4 2022 to 1.13 in Q4 2023. This indicates that the company generated less revenue from its fixed assets in the most recent quarter compared to the previous periods. A lower fixed asset turnover ratio may suggest that Constellation Energy Corporation is not effectively utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover ratio also shows a slight decline from 0.52 in Q4 2022 to 0.49 in Q4 2023. This ratio indicates how efficiently the company is generating sales from all its assets. A decreasing trend in total asset turnover may imply that Constellation Energy Corporation is becoming less efficient in generating revenue from its total asset base.

Overall, the declining trends in both the fixed asset turnover and total asset turnover ratios suggest a potential decrease in efficiency in utilizing assets to generate revenue for Constellation Energy Corporation. It may be worth investigating the reasons behind these decreases and implementing strategies to improve asset utilization efficiency in the future.