Nextera Energy Inc (NEE)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		5.43	4.49	4.51	5.58	6.27
DSO	days	67.26	81.33	80.91	65.41	58.20

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.43
= 67.26

Days of Sales Outstanding (DSO) measures how long, on average, it takes a company to collect its accounts receivable. A lower DSO indicates that the company is able to collect payments more quickly, which is generally seen as a positive indicator of efficient operations and strong cash flow management.

Analyzing the DSO trend of NextEra Energy Inc over the past five years, we observe fluctuations in the metric. In 2019, the DSO was 53.35 days, showing efficient collection of receivables. This increased significantly in 2020 to 60.32 days but decreased in 2021 to 87.84 days.

The significant decrease in DSO in 2023 to 59.11 days compared to the prior year may suggest an improvement in NextEra Energy's accounts receivable management and collection efficiency. A lower DSO could indicate the company's ability to convert sales into cash more rapidly, potentially improving liquidity and financial performance.

However, it is worth noting the increase in DSO from 2021 to 2022 before the subsequent decrease in 2023. This fluctuation may be influenced by various factors such as changes in customer payment behavior, sales terms, or economic conditions.

Overall, a decreasing trend in DSO, as seen in 2023 for NextEra Energy Inc, can be viewed positively as it indicates potential improvements in operating efficiency and cash flow management. Further monitoring of this ratio in conjunction with other financial metrics would be advisable to assess the company's financial health comprehensively.