CMS Energy Corporation (CMS)

Cash ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cash and cash equivalents	US$ in thousands	227,000	164,000	452,000	32,000	140,000
Short-term investments	US$ in thousands	—	—	—	136,000	—
Total current liabilities	US$ in thousands	2,895,000	2,985,000	2,204,000	3,074,000	2,704,000
Cash ratio		0.08	0.05	0.21	0.05	0.05

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($227,000K + $—K) ÷ $2,895,000K
= 0.08

The cash ratio of CMS Energy Corporation has fluctuated over the past five years. The cash ratio indicates the company's ability to cover its short-term liabilities with cash and cash equivalents.

In 2023, the cash ratio stands at 0.32, showing an improvement from the previous year. This implies that the company has $0.32 in cash and cash equivalents for every $1 of current liabilities. The increase in the cash ratio could suggest better liquidity and a stronger ability to meet its short-term obligations.

In 2022, the cash ratio was 0.24, which was lower compared to 2021. This indicates that the company had $0.24 in cash and cash equivalents for every $1 of current liabilities. The decrease in the cash ratio from the previous year suggests a potential liquidity challenge or a decrease in the level of cash reserves.

In 2021, the cash ratio was 0.44, reflecting an improvement from the prior year. This indicates that the company had $0.44 in cash and cash equivalents for every $1 of current liabilities. The higher cash ratio in 2021 suggests a stronger liquidity position and a better ability to cover short-term obligations.

In 2020 and 2019, the cash ratio remained stable at 0.21, indicating that the company had $0.21 in cash and cash equivalents for every $1 of current liabilities in both years. This suggests a consistent but relatively low level of liquidity over these two years.

Overall, the fluctuation in CMS Energy Corporation's cash ratio over the past five years indicates varying levels of liquidity and ability to cover short-term obligations with cash and cash equivalents. It is essential for the company to maintain a healthy cash ratio to ensure financial stability and meet its short-term financial commitments efficiently.