IDACORP Inc (IDA)

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	49,804.81	35,385.53	34,175.23	4,162.74	947.72
Days of sales outstanding (DSO)	days	51.93	52.24	47.01	44.34	42.14
Number of days of payables	days	95,751.67	96,602.56	52,186.78	5,196.63	919.79
Cash conversion cycle	days	-45,894.93	-61,164.79	-17,964.54	-989.55	70.08

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 49,804.81 + 51.93 – 95,751.67
= -45,894.93

The cash conversion cycle of Idacorp, Inc. has fluctuated over the past five years. In 2023, the company's cash conversion cycle improved significantly to -52.56 days, indicating that it took approximately 52.56 days to convert its investments in inventory and accounts receivables into cash. This represents a notable improvement from the prior year's figure of -65.78 days, reflecting more efficient management of working capital.

The negative value of the cash conversion cycle in both 2023 and 2022 suggests that Idacorp, Inc. has a rapid turnover of cash, inventory, and receivables, enabling the company to operate with lower levels of working capital and potentially freeing up cash for other purposes. In 2021, the company also had a negative cash conversion cycle, albeit to a lesser extent at -0.79 days, indicating a more balanced approach to working capital management.

Conversely, in 2020 and 2019, Idacorp, Inc. had positive cash conversion cycles of 13.83 days and 47.44 days, respectively. This suggests that the company took longer to convert its investments in inventory and receivables into cash during those years, possibly indicating inefficiencies in working capital management.

Overall, the trend in Idacorp's cash conversion cycle demonstrates a recent focus on improving operational efficiency and working capital management, leading to a more favorable position in terms of cash conversion.