MGE Energy Inc (MGEE)
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 | 1,156.76 | 1,238.49 | 1,271.05 | 1,252.02 | 1,387.29 | 1,525.90 | 1,170.78 | 813.34 | 970.84 | 905.81 | 833.94 | 714.58 | 934.55 | 980.24 | 898.12 | 773.05 | 786.00 | 7,497.81 | 7,796.02 | 9,817.89 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 236.25 |
| Number of days of payables | days | 1,042.17 | 916.57 | 682.03 | 698.19 | 1,108.22 | 1,218.90 | 1,712.39 | 848.03 | 1,198.59 | 1,029.58 | 844.15 | 994.51 | 1,080.41 | 1,111.76 | 793.24 | 743.90 | 957.47 | 6,144.40 | 7,868.06 | 12,274.95 |
| Cash conversion cycle | days | 114.60 | 321.92 | 589.02 | 553.83 | 279.06 | 307.00 | -541.61 | -34.69 | -227.74 | -123.77 | -10.21 | -279.94 | -145.86 | -131.52 | 104.87 | 29.16 | -171.48 | 1,353.40 | -72.04 | -2,220.81 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 1,156.76 + — – 1,042.17
= 114.60
The cash conversion cycle of MGE Energy Inc has fluctuated significantly over the periods provided. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A positive cash conversion cycle indicates that the company is taking longer to convert its investments into cash, while a negative cycle suggests efficient management of cash flows.
Analyzing the data, we can see that the company had an extremely high cash conversion cycle of 1,353.40 days in the third quarter of 2019, which suggests significant challenges in quickly converting its investments into cash at that time. However, this was followed by notable improvements in the subsequent periods, with negative cycles recorded in the second quarter of 2022 and the fourth quarter of 2022, indicating efficient management of cash flows and a quick conversion of investments into cash during those periods.
Overall, the data indicates that MGE Energy Inc has experienced fluctuations in its cash conversion cycle, with periods of inefficiencies followed by improvements in managing cash flows and investments more effectively. Further analysis and comparison with industry benchmarks would provide deeper insights into the company's working capital management and operational efficiency.