FirstEnergy Corporation (FE)

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	108.27	81.48	60.03	77.97	65.08
Days of sales outstanding (DSO)	days	37.38	38.61	33.87	40.69	36.09
Number of days of payables	days	288.02	290.88	217.71	203.41	212.61
Cash conversion cycle	days	-142.37	-170.79	-123.81	-84.74	-111.44

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 108.27 + 37.38 – 288.02
= -142.37

The cash conversion cycle of Firstenergy Corp. has shown variability over the past five years. In 2023, the company's cash conversion cycle improved significantly to -21.85 days, indicating that it took less time to convert resources into cash during the year. This may suggest more efficient management of working capital or better control over inventory and receivables.

In 2022, the cash conversion cycle was -39.96 days, representing a longer cycle compared to 2023. This could indicate challenges in managing working capital efficiently or delays in collecting receivables.

In 2021, the cash conversion cycle was -30.43 days, showing an improvement from the previous year. This suggests the company was able to streamline its cash conversion process.

In 2020, the cycle was -11.96 days, the shortest cycle among the listed years. This may indicate a rapid turnover of cash or tight control over working capital components.

In 2019, the cash conversion cycle was -34.38 days, indicating a longer cycle compared to 2020. This could imply a slower conversion of resources into cash during that year.

Overall, the trend in Firstenergy Corp.'s cash conversion cycle shows fluctuations over the years, with improvements noted in 2023, 2021, and 2020, while 2019 and 2022 indicate potential areas where efficiency could be further enhanced. A negative cash conversion cycle implies efficient management of working capital, where the company is able to generate cash quickly from its operations.