MGE Energy Inc (MGEE)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 958.14 | 1,050.29 | 1,119.34 | 1,104.62 | 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 |
| Days of sales outstanding (DSO) | days | 52.40 | 46.45 | 48.02 | 48.23 | 50.50 | 43.75 | 42.10 | 48.44 | 56.15 | 43.21 | 42.88 | 54.25 | 58.43 | 49.68 | 46.04 | 51.16 | 51.63 | 46.40 | 43.22 | 46.83 |
| Number of days of payables | days | 1,097.25 | 691.63 | 790.05 | 659.42 | 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 |
| Cash conversion cycle | days | -86.71 | 405.11 | 377.30 | 493.43 | 165.10 | 365.67 | 631.12 | 602.27 | 335.21 | 350.21 | -498.74 | 19.56 | -169.31 | -74.09 | 35.83 | -228.78 | -94.23 | -85.12 | 148.09 | 75.98 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 958.14 + 52.40 – 1,097.25
= -86.71
The cash conversion cycle of MGE Energy Inc has shown significant fluctuations over the periods analyzed. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From March 31, 2020, to December 31, 2024, MGE Energy Inc's cash conversion cycle fluctuated between positive and negative values. During this period, there were instances of efficient cash management where the company converted its investments into cash quickly (negative days), indicating effective management of working capital and speedy turnover of inventory.
Conversely, there were periods where the cash conversion cycle was prolonged (positive days), suggesting potential inefficiencies in managing its working capital, inventory levels, or collection of receivables. The company experienced the longest cash conversion cycle of 631.12 days on June 30, 2023, indicating potential challenges in efficiently converting investments into cash during that period.
Overall, analyzing the trend and magnitude of the cash conversion cycle can provide insights into the company's liquidity management, operational efficiency, and effectiveness in managing its working capital over time. Further investigation into the factors driving these fluctuations would be necessary to assess the company's financial health and performance comprehensively.