CMS Energy Corporation (CMS)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	244.71	326.07	300.45	240.33	255.15
Days of sales outstanding (DSO)	days	27.25	23.14	95.24	71.17	90.65
Number of days of payables	days	—	—	249.61	315.28	292.80
Cash conversion cycle	days	271.96	349.20	146.08	-3.78	53.00

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 244.71 + 27.25 – —
= 271.96

The cash conversion cycle of CMS Energy Corporation has experienced fluctuations over the past few years.

- As of December 31, 2020, the company had a cash conversion cycle of 53.00 days, indicating that it took approximately 53 days for CMS Energy to convert its investments in inventory and accounts receivable into cash.
- By December 31, 2021, the cash conversion cycle turned negative at -3.78 days, implying that CMS Energy was able to convert its investments into cash more quickly, possibly due to improvements in inventory management and accounts receivable collection.
- The cycle increased significantly by December 31, 2022, reaching 146.08 days. This longer cash conversion cycle might suggest inefficiencies in the company's working capital management or delays in converting inventory and receivables into cash.
- By December 31, 2023, the cycle further extended to 349.20 days, reflecting a notable delay in cash conversion compared to previous years.
- As of December 31, 2024, the cash conversion cycle decreased to 271.96 days, while still remaining at a relatively high level compared to earlier years.

Overall, the varying trends in CMS Energy's cash conversion cycle indicate fluctuations in its efficiency in managing working capital and converting investments into cash. Further analysis of the underlying reasons for these changes would be necessary to determine their impact on the company's financial performance and liquidity position.