CMS Energy Corporation (CMS)

Short-term

Turnover ratios

CMS Energy Corporation's inventory turnover has fluctuated over the past few years, indicating changes in how efficiently the company is managing its inventory. The ratio ranged from a low of 0.99 to a high of 2.32 during the period under review. Generally, higher inventory turnover ratios are preferred as they indicate a faster conversion of inventory into sales.

The receivables turnover ratio for CMS Energy Corporation has experienced significant variability, ranging from 3.83 to 26.41. This suggests that the company collects its accounts receivable at different rates over time. A higher receivables turnover ratio is desirable as it reflects a shorter time to collect outstanding payments from customers.

In terms of payables turnover, CMS Energy Corporation's performance has shown consistency in the early years, with the ratio fluctuating slightly between 1.21 and 1.78. However, from March 2023 onwards, no data is available, which could imply changes in the company's payment practices or data reporting. A higher payables turnover ratio indicates that the company is paying its suppliers more quickly.

The working capital turnover ratio, which measures how efficiently a company utilizes its working capital to generate sales, shows a mix of data availability and values. The ratio ranged from 2,013.00 to 180.98, with intermittent gaps in data. Higher values for this ratio signal that the company is effectively using its working capital to support revenue generation.

Overall, analyzing these activity ratios provides insight into how effectively CMS Energy Corporation is managing its inventory, receivables, payables, and working capital to support its operational activities and financial performance.

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Average number of days

The activity ratios of CMS Energy Corporation provide insights into how efficiently the company manages its inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH): This ratio indicates how many days it takes for the company to sell its inventory. The trend for CMS Energy Corporation shows fluctuating DOH values over the years, ranging from as low as 157.52 days to as high as 369.18 days. A lower DOH is generally preferred as it implies that the company is selling inventory more quickly, while a higher DOH may suggest slower inventory turnover.

2. Days of Sales Outstanding (DSO): DSO measures how long it takes for the company to collect payments from its customers. The DSO for CMS Energy Corporation varies significantly, with values as low as 13.82 days to as high as 95.24 days. A lower DSO indicates that the company is collecting payments more quickly, which is favorable for cash flow and liquidity.

3. Number of Days of Payables: This ratio reflects how long the company takes to pay its suppliers. CMS Energy Corporation shows varying days of payables values, ranging from 188.18 days to 313.42 days. A longer payment period can indicate stronger cash flow management, but too lengthy payables may strain supplier relationships.

Overall, analyzing these activity ratios together can provide a comprehensive view of how efficiently CMS Energy Corporation manages its operating cycle. A balance between inventory management, accounts receivable collection, and accounts payable payment is crucial for the company's financial health and operational effectiveness.

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Long-term

The Fixed Asset Turnover ratio for CMS Energy Corporation has shown a fluctuating trend over the past few years, ranging from a low of 0.27 in December 2024 to a high of 0.38 in December 2022. This ratio measures how efficiently the company is generating revenue from its fixed assets, such as property, plant, and equipment. The increasing trend from December 2022 to June 2023 indicates improved utilization of fixed assets, but the subsequent decrease suggests a potential decrease in asset efficiency.

The Total Asset Turnover ratio, which reflects how efficiently the company is utilizing all its assets to generate revenue, has also displayed variation over the same period. It ranged from a low of 0.21 in December 2024 to a high of 0.28 in June 2022. The decreasing trend from June 2022 to December 2024 could signify a potential decline in overall asset efficiency in generating revenue.

Analyzing both ratios together can provide insights into CMS Energy Corporation's management of both fixed and total assets to drive revenue generation. The company may need to focus on strategies to improve asset utilization efficiency to enhance financial performance in the long term.