NRG Energy Inc. (NRG)

Short-term

Turnover ratios

The activity ratios provide insights into how efficiently NRG Energy Inc. manages its assets and liabilities to generate revenue.

1. Inventory Turnover:
- NRG Energy Inc.'s inventory turnover has been increasing steadily over the years, reaching 46.23 in 2024 from 20.00 in 2020. This indicates that the company is selling its inventory more frequently, which is a positive sign of efficient inventory management.

2. Receivables Turnover:
- There is no data available for NRG Energy Inc.'s receivables turnover for the period under consideration. Receivables turnover ratio helps in assessing how quickly the company collects its receivables from customers.

3. Payables Turnover:
- Similar to receivables turnover, there is no information provided for payables turnover. The payables turnover ratio measures how quickly a company pays its suppliers.

4. Working Capital Turnover:
- NRG Energy Inc.'s working capital turnover has shown significant fluctuations, with a sharp increase to 126.97 in 2023 from 2.21 in 2020. This suggests that the company has been utilizing its working capital efficiently to generate revenue. However, there is no data available for 2024.

In conclusion, NRG Energy Inc. has exhibited improvements in its inventory turnover and working capital turnover ratios, indicating efficiency in managing its assets. It would be beneficial to monitor the company's performance in the area of receivables and payables turnover for a more comprehensive assessment of its overall activity efficiency.

---

Average number of days

Based on the provided data, we can analyze the activity ratios of NRG Energy Inc. as follows:

1. Days of Inventory on Hand (DOH):
- The company's DOH has decreased from 18.25 days as of December 31, 2020, to 7.89 days as of December 31, 2024.
- A decreasing trend in DOH indicates that NRG Energy Inc. is managing its inventory more efficiently, potentially leading to lower holding costs and better cash flow management.

2. Days of Sales Outstanding (DSO):
- The data shows that DSO is not provided for any of the years from 2020 to 2024.
- The absence of DSO information makes it challenging to assess the effectiveness of the company in collecting its accounts receivable in a timely manner.

3. Number of Days of Payables:
- Similar to DSO, information on the number of days of payables is not available for the years 2020 to 2024.
- Without data on the payables period, it is difficult to evaluate how long the company takes to pay its suppliers and manage its working capital cycle effectively.

In conclusion, the provided data indicates an improvement in inventory management based on the decreasing trend in Days of Inventory on Hand. However, the lack of information on Days of Sales Outstanding and Number of Days of Payables hinders a comprehensive assessment of NRG Energy Inc.'s overall activity ratios and working capital management.

---

Long-term

Based on the data provided for NRG Energy Inc., we can analyze the company's long-term activity ratios, specifically the fixed asset turnover and total asset turnover.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how efficiently a company is generating revenue from its fixed assets.
- In 2020, the fixed asset turnover ratio was 3.57, indicating that for every dollar of fixed assets, the company generated $3.57 in revenue.
- The ratio saw a significant increase in 2021 to 13.78, signaling a substantial improvement in asset utilization.
- This trend continued in 2022, with the fixed asset turnover ratio further increasing to 16.45, demonstrating the company's enhanced efficiency in utilizing its fixed assets.
- The data for 2023 and 2024 is not available, so it is difficult to assess the trend beyond 2022.

2. Total Asset Turnover:
- The total asset turnover ratio measures how efficiently a company is generating revenue from its total assets.
- In 2020, the total asset turnover ratio was 0.61, indicating that the company generated $0.61 in revenue for every dollar of total assets.
- There was a notable improvement in 2021, as the total asset turnover ratio increased to 1.16, showing increased efficiency in utilizing total assets to generate revenue.
- In 2022, the ratio slightly decreased to 1.08, but it remained above 1, indicating that the company continued to efficiently generate revenue from its total assets.
- The ratio further increased in 2023 to 1.11 and again in 2024 to 1.17, showing a positive trend in asset utilization over the years.

In summary, NRG Energy Inc. has shown significant improvements in both fixed asset turnover and total asset turnover ratios, indicating enhanced efficiency in utilizing assets to generate revenue. The company seems to have effectively managed its assets to drive revenue growth and maximize returns.