Exelon Corporation (EXC)

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	50.77	49.87	63.85	64.54	76.60
Days of sales outstanding (DSO)	days	56.65	68.47	104.30	104.22	50.80
Number of days of payables	days	—	223.39	81.27	133.50	154.25
Cash conversion cycle	days	107.41	-105.04	86.88	35.26	-26.84

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 50.77 + 56.65 – —
= 107.41

Exelon Corp.'s cash conversion cycle, a measure of how long it takes for the company to convert its investments in inventory and other resources into cash flows from sales, has fluctuated significantly over the past five years.

In 2023, Exelon Corp. achieved a negative cash conversion cycle of -34.33 days, indicating that the company is efficiently managing its working capital by collecting receivables and paying off payables faster than holding onto inventory. This is a substantial improvement compared to the previous year, where the company had a much higher negative cycle of -86.47 days.

In contrast, in 2021 and 2020, Exelon Corp. had positive cash conversion cycles of 3.72 days and 3.39 days, respectively, suggesting that the company took longer to convert its investments into cash during those years. These figures represent a potential area for improvement in terms of managing working capital efficiency.

In 2019, Exelon Corp. had a cash conversion cycle of 23.12 days, indicating a moderate efficiency in converting investments into cash flows.

Overall, Exelon Corp. should continue to focus on optimizing its cash conversion cycle by streamlining its operating processes, managing inventory levels efficiently, and ensuring prompt collections from customers to enhance its liquidity position and overall financial performance.