Entergy Corporation (ETR)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2019	Dec 31, 2018
Days of inventory on hand (DOH)	days	180.00	143.01	130.10	105.74	90.07
Days of sales outstanding (DSO)	days	44.53	42.84	43.22	43.61	39.62
Number of days of payables	days	198.75	214.83	326.05	192.24	178.99
Cash conversion cycle	days	25.78	-28.99	-152.73	-42.89	-49.30

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 180.00 + 44.53 – 198.75
= 25.78

The cash conversion cycle of Entergy Corp. has shown significant fluctuations over the past five years. In 2023, the company's cash conversion cycle was 46.23 days, which indicates that it takes approximately 46 days for Entergy Corp. to convert its investments in inventory and other resources into cash from sales. This represents a considerable increase compared to the previous year, where the cycle was only 8.86 days.

In 2022, Entergy Corp. experienced a relatively short cash conversion cycle of -95.79 days, suggesting that the company was able to collect cash from customers before paying its creditors and suppliers. This negative cycle indicates efficient management of working capital.

In contrast, in 2021 and 2020, Entergy Corp. had negative cash conversion cycles of -190.80 days and -19.41 days, respectively, indicating that the company was able to convert its investments into cash quickly, efficiently managing its working capital during those years.

Overall, the trend in Entergy Corp.'s cash conversion cycle fluctuates significantly, with 2023 showing an increased cycle compared to the previous year. It is essential for the company to monitor and manage its working capital effectively to ensure a healthy cash conversion cycle in the future.