OGE Energy Corporation (OGE)

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	36.91	17.77	5.60	6.95	13.67
Days of sales outstanding (DSO)	days	40.90	37.30	22.97	40.16	37.52
Number of days of payables	days	64.37	73.31	37.78	47.87	57.53
Cash conversion cycle	days	13.45	-18.24	-9.22	-0.76	-6.34

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 36.91 + 40.90 – 64.37
= 13.45

The cash conversion cycle of Oge Energy Corp. has exhibited significant fluctuations over the past five years. In 2023, the company's cash conversion cycle increased substantially to 95.51 days from the previous year's low of 2.26 days in 2022. This indicates that Oge Energy Corp. took longer to convert its investments in inventory and accounts receivable into cash during 2023.

Comparing to 2021 and 2020 where the cash conversion cycle stood at 3.15 days and -15.79 days respectively, the positive figure in 2023 suggests a less efficient utilization of the company's working capital during the year.

Although the cash conversion cycle in 2019 was higher at 10.62 days compared to 2022 and 2021, it was still lower than the 2023 value. This suggests that the company was able to manage its working capital more efficiently in 2019 compared to 2023.

Overall, the fluctuation in Oge Energy Corp.'s cash conversion cycle over the past five years indicates varying levels of efficiency in managing its cash flow from operations, inventory, and accounts receivable. An increasing cash conversion cycle may indicate potential liquidity challenges or inefficiencies in working capital management, while a decreasing cycle may signal improved efficiency in converting investments into cash.