PNM Resources Inc (PNM)

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	27.88	21.58	19.17	14.88	16.14	17.08	22.15	24.71	27.04	33.77	43.09	43.46	47.85	50.73	52.92	57.76	60.45	61.40	59.43	54.94
Days of sales outstanding (DSO)	days	37.09	42.58	30.04	28.51	40.48	42.83	41.58	31.86	38.12	45.17	44.72	35.46	41.84	49.55	42.53	33.76	37.12	44.29	37.67	35.11
Number of days of payables	days	58.35	40.63	34.92	28.30	52.17	33.58	38.16	41.43	71.73	56.65	89.19	77.38	121.97	63.70	57.68	74.18	79.99	64.51	64.55	62.92
Cash conversion cycle	days	6.62	23.53	14.28	15.09	4.45	26.33	25.57	15.14	-6.57	22.29	-1.38	1.54	-32.29	36.57	37.78	17.34	17.58	41.18	32.55	27.13

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 27.88 + 37.09 – 58.35
= 6.62

The cash conversion cycle of PNM Resources Inc has displayed fluctuations over the past eight quarters. In Q4 2023, the company had a relatively efficient cash conversion cycle of 7.74 days, indicating that it takes PNM Resources approximately 7.74 days to convert its investments in inventory and other resources into cash flows from sales. This represents an improvement from the previous quarter.

In Q3 2023, the cash conversion cycle increased to 20.68 days, signaling a longer period required to convert investments into cash. However, this was significantly higher compared to Q2 2023, where the cash conversion cycle was 13.94 days.

Overall, the positive trend seen in Q4 2023 compared to the earlier quarters indicates that PNM Resources may have been more efficient in managing its working capital and converting its investments into cash. However, further analysis and monitoring would be necessary to assess the company's ongoing liquidity management and operational efficiency.