CMS Energy Corporation (CMS)
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 | 326.07 | 300.45 | 240.33 | 255.15 | 247.84 |
| Days of sales outstanding (DSO) | days | 23.14 | 95.24 | 71.17 | 90.65 | 85.52 |
| Number of days of payables | days | — | 249.61 | 315.28 | 292.80 | 254.80 |
| Cash conversion cycle | days | 349.20 | 146.08 | -3.78 | 53.00 | 78.56 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 326.07 + 23.14 – —
= 349.20
The cash conversion cycle of CMS Energy Corporation has shown fluctuations over the past five years. In 2023, the cash conversion cycle decreased to 62.34 days from 82.95 days in 2022, indicating a more efficient cash management process. This improvement suggests that the company is taking less time to convert its investments in inventory and accounts receivable into cash.
Comparing 2023 to 2021 and earlier years, the cash conversion cycle has increased significantly. This signifies that CMS Energy Corporation took longer to convert its investments into cash during those periods. The cash conversion cycle was notably high in 2022 and 2019, indicating potential inefficiencies in managing cash flow and working capital during those years.
Overall, the trend in the cash conversion cycle of CMS Energy Corporation shows variability, but the recent improvement in 2023 suggests enhanced efficiency in managing working capital and cash flow. Further analysis of factors driving these changes would provide a deeper insight into the company's financial performance and operational effectiveness.
Peer comparison
Dec 31, 2023