Kinder Morgan Inc (KMI)

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	38.52	32.56	22.62	22.55	24.69
Days of sales outstanding (DSO)	days	36.40	37.80	35.78	36.32	41.80
Number of days of payables	days	96.82	84.71	51.51	50.52	59.38
Cash conversion cycle	days	-21.90	-14.35	6.88	8.36	7.11

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 38.52 + 36.40 – 96.82
= -21.90

The cash conversion cycle of Kinder Morgan Inc has shown fluctuations over the past five years.

As of December 31, 2020, the company's cash conversion cycle stood at 7.11 days, indicating that it takes approximately 7.11 days for Kinder Morgan to convert its investments in inventory and other resources into cash.

By December 31, 2021, the cash conversion cycle increased to 8.36 days, suggesting a slight delay in the company's ability to convert its investments into cash.

In contrast, the following year, by December 31, 2022, Kinder Morgan managed to improve its cash conversion cycle to 6.88 days, indicating a more efficient management of its working capital.

The cash conversion cycle took a significant turn by December 31, 2023, showing a negative value of -14.35 days. This implies that Kinder Morgan was able to convert its investments into cash at a quicker pace than in the previous years, potentially indicating more efficient operations or improved collection and payment processes.

By December 31, 2024, the cash conversion cycle further decreased to -21.90 days, demonstrating an even more rapid conversion of investments into cash. This negative value suggests that Kinder Morgan's cash inflows are happening before its cash outflows, which may be beneficial for the company's cash flow management and liquidity.

Overall, analyzing the trend in Kinder Morgan Inc's cash conversion cycle over the years provides insights into the company's efficiency in managing its working capital and liquidity position.