CenterPoint Energy Inc (CNP)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 347.40 | 333.41 | 228.08 | 160.79 | 40.92 |
| Days of sales outstanding (DSO) | days | 55.40 | 65.51 | 52.62 | 62.15 | 93.66 |
| Number of days of payables | days | 413.73 | 514.58 | 448.65 | 274.31 | 66.25 |
| Cash conversion cycle | days | -10.92 | -115.66 | -167.96 | -51.37 | 68.33 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 347.40 + 55.40 – 413.73
= -10.92
The cash conversion cycle of Centerpoint Energy Inc. has exhibited varying trends over the past five years.
In 2023, the cash conversion cycle increased significantly to 30.56 days compared to 9.30 days in 2022. This indicates that the company took longer to convert its investments in inventory into cash during the most recent year.
In 2021, the cash conversion cycle was negative at -39.30 days, suggesting that the company was able to convert its investments in inventory into cash rapidly during that period. This could be an indication of efficient inventory management and speedy collection of receivables.
In 2020, the cash conversion cycle was also negative at -11.69 days, albeit less so than in 2021. This implies that the company continued to efficiently manage its working capital during that year.
In 2019, the cash conversion cycle increased to 19.76 days, indicating that the company took longer to convert its investments in inventory into cash compared to the two preceding years.
Overall, fluctuations in Centerpoint Energy Inc.'s cash conversion cycle over the past five years suggest varying levels of efficiency in managing its working capital, with 2021 and 2020 showing particularly strong performance in this regard. Monitoring this ratio is crucial for assessing the company's liquidity and operational efficiency.
Peer comparison
Dec 31, 2023