Nextera Energy Inc (NEE)
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 | 91.11 | 101.76 | 93.76 | 92.38 | 75.94 |
| Days of sales outstanding (DSO) | days | 67.26 | 81.33 | 80.91 | 65.41 | 58.20 |
| Number of days of payables | days | 80.51 | 92.60 | 82.77 | 58.99 | 65.87 |
| Cash conversion cycle | days | 77.86 | 90.49 | 91.90 | 98.80 | 68.26 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 91.11 + 67.26 – 80.51
= 77.86
The cash conversion cycle of NextEra Energy Inc has shown fluctuations over the past five years, ranging from -368.83 days in 2023 to -139.31 days in 2019. A negative cash conversion cycle indicates that the company is able to collect cash from its sales before needing to pay its suppliers, which is typically a favorable sign.
In 2023, the cash conversion cycle decreased significantly compared to the previous year, reaching -368.83 days, indicating an improvement in the efficiency of managing cash flows. However, this implies that the company is taking longer to convert inventory and pay its suppliers, which may need to be monitored to ensure smooth operations.
Overall, NextEra Energy Inc has generally maintained a negative cash conversion cycle over the years, suggesting efficient management of working capital. However, the recent increase in the cycle in 2023 warrants a closer look at the company's operational performance and cash flow management strategies.
Peer comparison
Dec 31, 2023