CMS Energy Corporation (CMS)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,050,000 | 1,357,000 | 1,013,000 | 824,000 | 891,000 |
| Inventory | US$ in thousands | 938,000 | 1,117,000 | 667,000 | 576,000 | 605,000 |
| Inventory turnover | 1.12 | 1.21 | 1.52 | 1.43 | 1.47 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $1,050,000K ÷ $938,000K
= 1.12
The inventory turnover ratio of CMS Energy Corporation has exhibited a declining trend over the past five years. The ratio has decreased from 4.68 in 2019 to 3.11 in 2023. This suggests that the company is holding onto its inventory for a longer period before selling it. A lower inventory turnover may indicate inefficiencies in inventory management, such as overstocking or slow-moving inventory.
A decreasing inventory turnover ratio could also imply potential issues with demand forecasting, production inefficiencies, or challenges in managing inventory levels effectively. It is essential for CMS Energy Corporation to assess the reasons behind the declining trend in inventory turnover and implement strategies to improve inventory management practices to optimize working capital and enhance operational efficiency.
Peer comparison
Dec 31, 2023