CMS Energy Corporation (CMS)

Days of inventory on hand (DOH)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover		1.49	1.12	1.21	1.52	1.43
DOH	days	244.71	326.07	300.45	240.33	255.15

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 1.49
= 244.71

The days of inventory on hand (DOH) is a crucial metric in evaluating CMS Energy Corporation's management of inventory levels. Looking at the data provided, we observe a fluctuating trend over the past five years:

- As of December 31, 2020, the company had 255.15 days of inventory on hand, indicating that it took more than 255 days for the company to sell its average inventory.
- By the end of 2021, the DOH decreased to 240.33 days, suggesting a slight improvement in inventory management efficiency.
- However, in the following years, there was an increase in the DOH. By December 31, 2022, the DOH rose to 300.45 days, signaling a potential buildup of excess inventory.
- This trend continued into 2023 and 2024, with DOH reaching 326.07 days and then dropping to 244.71 days, respectively.

The rising DOH figures from 2022 to 2024 could indicate challenges in effectively managing inventory levels, potentially resulting in increased carrying costs, obsolescence, and reduced liquidity. It would be important for CMS Energy Corporation to analyze the reasons behind these fluctuations and implement strategies to optimize inventory turnover and mitigate risks associated with bloated inventory levels.