Consolidated Edison Inc (ED)

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	33.19	34.78	29.74	26.62	30.80
Days of sales outstanding (DSO)	days	59.89	51.06	51.62	51.27	36.34
Number of days of payables	days	125.63	138.18	101.88	110.30	101.84
Cash conversion cycle	days	-32.54	-52.35	-20.53	-32.41	-34.70

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 33.19 + 59.89 – 125.63
= -32.54

Consolidated Edison, Inc. has shown an improvement in its cash conversion cycle over the years. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flow from sales.

From Dec 31, 2019 to Dec 31, 2023, Consolidated Edison, Inc. has reduced its cash conversion cycle from -51.17 days to -36.24 days. This indicates that the company has been able to convert its investments into cash more efficiently in recent years, which could be attributed to better inventory management and collection of receivables.

The decreasing trend in the cash conversion cycle suggests that Consolidated Edison, Inc. has been able to streamline its operations and manage its working capital effectively. A lower (or negative) cash conversion cycle typically indicates that the company is able to collect cash from customers before having to pay its suppliers, resulting in a more efficient cash flow management.

Overall, the improvement in Consolidated Edison, Inc.'s cash conversion cycle reflects positively on the company's ability to generate cash and manage its working capital efficiently over the years.