NRG Energy Inc. (NRG)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 8.14 | 6.60 | 8.32 | 10.06 | 9.58 | |
| DSO | days | 44.85 | 55.29 | 43.89 | 36.29 | 38.09 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 8.14
= 44.85
The days of sales outstanding (DSO) metric for NRG Energy Inc. has fluctuated over the past five years. In 2023, the DSO stands at 44.85 days, showing an improvement from the previous year where it was 55.23 days. This decrease indicates that the company's efficiency in collecting accounts receivable has improved.
Comparing the DSO to 2021 and 2020, we see that it was 43.89 days and 36.29 days, respectively. This suggests that in 2022, there was a slight increase in the time it takes for NRG Energy to collect its receivables. However, compared to 2019 when the DSO was 38.09 days, the DSO in 2023 is higher, indicating a potential issue with receivables management.
It is crucial for NRG Energy to monitor its DSO closely as it directly impacts the company's cash flow and liquidity. A lower DSO signifies faster collections and better cash flow management, while a higher DSO could indicate inefficiencies in the accounts receivable process. NRG Energy should continue to focus on maintaining an optimal balance between credit sales and collection efficiency to support its financial health and operational effectiveness.
Peer comparison
Dec 31, 2023