Entergy Corporation (ETR)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	106.83	86.29	57.23	63.54	73.26
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	106.83	86.29	57.23	63.54	73.26

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 106.83 + — – —
= 106.83

The cash conversion cycle for Entergy Corporation has shown fluctuations over the years, indicating changes in the efficiency of managing its working capital.

In 2020, the cash conversion cycle stood at 73.26 days, reflecting the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.

By the end of 2021, the cycle improved to 63.54 days, suggesting better control over inventory levels and quicker collection of receivables. This reduction indicates a more efficient cash flow management.

In 2022, the cash conversion cycle continued to decrease to 57.23 days, signaling further enhancements in working capital management efficiency, potentially through streamlined operational processes and optimized inventory turnover.

However, in 2023, there was a significant increase in the cycle to 86.29 days, indicating a potential slowdown in converting assets into cash, which could be a result of changes in sales patterns, inventory management issues, or delays in accounts receivable collections.

By the end of 2024, the cash conversion cycle further increased to 106.83 days, suggesting a prolonged time span for the company to convert its investments into cash receipts, which may raise concerns about the efficiency of the firm's working capital management.

Analyzing the trend of the cash conversion cycle over the years can provide insights into Entergy Corporation's operational efficiency, liquidity management, and overall financial health.