PNM Resources Inc (PNM)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.39 | 0.33 | 0.37 | 0.29 | 0.46 | 0.61 | 0.41 | 0.45 | 0.49 | 0.94 | 0.62 | 0.22 | 0.39 | 0.30 | 0.26 | 0.26 | 0.30 | 0.36 | 0.45 | 0.69 |
| Quick ratio | 0.16 | 0.17 | 0.18 | 0.16 | 0.31 | 0.38 | 0.28 | 0.25 | 0.28 | 1.51 | 1.05 | 0.39 | 0.68 | 0.51 | 0.14 | 0.13 | 0.16 | 0.21 | 0.23 | 0.48 |
| Cash ratio | 0.00 | 0.01 | 0.01 | 0.00 | 0.03 | 0.01 | 0.03 | 0.01 | 0.00 | 1.06 | 0.74 | 0.29 | 0.50 | 0.35 | 0.00 | 0.01 | 0.00 | 0.02 | 0.01 | 0.27 |
PNM Resources Inc's liquidity ratios show a declining trend over the past eight quarters. The current ratio has consistently been below 1, indicating that the company may have difficulty meeting its short-term obligations with its current assets. The quick ratio, which excludes inventory and prepaid assets from current assets, also remained below 1, suggesting a potential liquidity challenge in covering immediate liabilities.
Moreover, the cash ratio, which measures the ability to cover short-term liabilities with cash and cash equivalents, shows a decreasing pattern, with a notable decline from Q3 2022 to Q4 2022. This indicates a potential strain on the company's ability to meet current obligations solely with cash on hand.
Overall, PNM Resources Inc's liquidity ratios paint a concerning picture, indicating a limited ability to meet short-term obligations using current assets. The company may need to focus on improving its liquidity position to ensure it can fulfill its financial commitments in the future.
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
The cash conversion cycle of PNM Resources Inc has exhibited fluctuations over the past eight quarters. In Q4 2023, the company's cash conversion cycle was 7.74 days, indicating that it took approximately 7.74 days for the company to convert its investments in inventory and other resources into cash flows from sales. This was a significant improvement from the previous quarter, Q3 2023, where the cash conversion cycle was 20.68 days.
The trend in the cash conversion cycle over the past year shows some variability, with Q3 2022 showing the highest cycle at 24.31 days, while Q4 2022 actually had a negative cash conversion cycle of -4.12 days, which implies that the company was able to convert investments into cash faster than acquiring the resources.
Overall, fluctuations in the cash conversion cycle can be influenced by various factors such as inventory management practices, sales policies, and collection efficiency. It is important for PNM Resources Inc to monitor and manage its cash conversion cycle effectively to ensure optimal liquidity and operational efficiency.