Entergy Corporation (ETR)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.57 | 0.91 | 0.80 | 0.90 | 0.64 | 0.90 | 0.87 | 0.72 | 0.59 | 0.64 | 1.00 | 1.06 | 0.59 | 0.58 | 0.66 | 0.54 | 0.72 | 0.73 | 0.70 | 0.54 |
| Quick ratio | 0.23 | 0.55 | 0.44 | 0.55 | 0.27 | 0.44 | 0.38 | 0.35 | 0.28 | 0.37 | 0.54 | 0.84 | 0.60 | 0.58 | 0.63 | 0.54 | 0.71 | 0.81 | 0.79 | 0.67 |
| Cash ratio | 0.02 | 0.26 | 0.20 | 0.34 | 0.04 | 0.16 | 0.10 | 0.13 | 0.07 | 0.15 | 0.19 | 0.57 | 0.40 | 0.38 | 0.45 | 0.33 | 0.45 | 0.54 | 0.57 | 0.47 |
Entergy Corp.'s liquidity ratios exhibit fluctuations over the recent quarters. The current ratio, which measures the company's ability to cover short-term liabilities with current assets, shows a declining trend from Q4 2022 to Q4 2023. This suggests potential challenges in meeting immediate financial obligations.
The quick ratio, which is a more conservative measure of liquidity as it excludes inventory from current assets, also experienced a decreasing trend over the same period. The declining quick ratio indicates that Entergy Corp. may have less available liquid assets to cover its short-term liabilities quickly.
Moreover, the cash ratio, which provides the most stringent assessment of liquidity by considering only cash and cash equivalents, also shows a downward trend from Q4 2022 to Q4 2023. This indicates a decreasing ability of Entergy Corp. to cover its short-term liabilities with its most liquid assets.
Overall, the downward trends in all three liquidity ratios suggest that Entergy Corp. may face challenges in meeting its short-term financial obligations and should consider implementing strategies to improve its liquidity position.
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 25.86 | 56.09 | 14.83 | 14.18 | -37.58 | -38.40 | -72.85 | -42.21 | -151.90 | -252.02 | 3.19 | -57.41 | -221.28 | -40.06 | -48.80 | -43.73 | -16.13 | -33.50 | -31.43 | -35.17 |
The cash conversion cycle of Entergy Corp. fluctuated over the past eight quarters. In Q4 2023, the company's cash conversion cycle was 46.23 days, indicating that it takes approximately 46 days for Entergy to convert its investments in inventory and other resources into cash from sales. This was a decrease from the previous quarter where the cycle was 66.93 days.
In Q2 2023 and Q1 2023, the cash conversion cycle was 37.40 days and 34.29 days, respectively, reflecting relatively efficient cash conversion processes during those periods. However, these figures were higher compared to Q4 2022, which had a significantly lower cycle of 8.86 days.
It is worth noting that there were instances of negative cash conversion cycles in Q2 2022 and Q1 2022, which may suggest that Entergy was able to convert its investments into cash at a faster rate than its payables were due during those periods.
Overall, fluctuations in the cash conversion cycle indicate varying efficiency in managing working capital and cash flow within Entergy Corp. It is important for the company to monitor and improve its cash conversion cycle to ensure optimal liquidity and operational effectiveness.