CMS Energy Corporation (CMS)

Cash conversion cycle

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	326.07	369.18	271.15	201.21	304.94	362.50	261.60	157.52	238.92	271.96	209.74	170.17	251.18	292.27	226.06	181.87	248.40	283.17	219.96	158.32
Days of sales outstanding (DSO)	days	23.14	13.82	13.99	63.04	95.24	67.48	63.05	73.24	71.17	55.61	60.18	83.09	90.65	52.95	57.11	63.71	82.76	47.28	53.34	83.78
Number of days of payables	days	—	—	—	188.18	253.34	263.81	280.48	238.36	313.42	281.62	256.43	224.94	288.25	302.79	281.01	205.34	255.38	242.25	249.84	194.86
Cash conversion cycle	days	349.20	383.00	285.14	76.06	146.84	166.17	44.17	-7.60	-3.34	45.95	13.49	28.32	53.59	42.43	2.16	40.25	75.78	88.19	23.45	47.25

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 326.07 + 23.14 – —
= 349.20

The cash conversion cycle for CMS Energy Corporation has shown some fluctuations over the past eight quarters. In Q4 2023, the cash conversion cycle was 62.34 days, indicating the number of days it takes for the company to convert its investments in inventory and other resources into cash flows from sales. This was higher compared to the previous quarter (Q3 2023) when the cycle was 56.17 days.

The trend in the cash conversion cycle over the past two years displays variability, with some quarters showing longer cycles (Q4 2022 and Q3 2022) and others shorter cycles (Q2 2022 and Q1 2022). The longest cycle was observed in Q4 2022 at 82.95 days, while the shortest cycle was in Q1 2022 at 24.25 days.

Overall, the company should focus on managing its working capital efficiently to reduce the cash conversion cycle, as a shorter cycle indicates improved liquidity and operational efficiency. Monitoring and addressing factors such as inventory management, accounts receivable collection, and accounts payable turnover can help CMS Energy Corporation optimize its cash conversion cycle to strengthen its financial position.