MGE Energy Inc (MGEE)
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 | 1,161.83 | 1,387.29 | 970.84 | 934.55 | 826.48 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | 1,046.73 | 1,108.22 | 1,198.59 | 1,080.41 | 1,006.79 |
| Cash conversion cycle | days | 115.10 | 279.06 | -227.74 | -145.86 | -180.31 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 1,161.83 + — – 1,046.73
= 115.10
The cash conversion cycle of MGE Energy Inc has exhibited significant fluctuations over the past five years. In 2023, the company's cash conversion cycle was 115.10 days, showing a substantial improvement from the previous year. This indicates that MGE Energy is managing its cash conversion more efficiently compared to 2022.
In 2022, the cash conversion cycle was 279.06 days, suggesting that the company took longer to convert its resources into cash during that period. This was a significant increase compared to 2021, where the cash conversion cycle was negative at -227.74 days. A negative cycle indicates that the company was able to convert its resources into cash at a faster rate.
The cash conversion cycle in 2020 and 2019 was also negative, showing that MGE Energy had efficient cash conversion during those years. However, the cycle in 2020 was less favorable compared to 2019, as it was -145.86 days in 2020 and -180.31 days in 2019.
Overall, the trend in MGE Energy's cash conversion cycle shows fluctuations over the years, with both positive and negative cycles. It is important for the company to consistently monitor and manage its cash conversion cycle effectively to ensure optimal financial performance.