TXNM Energy, Inc. (TXNM)

TXNM Energy, Inc.'s liquidity ratios indicate a concerning trend over the years. The current ratio, which measures the company's ability to cover its short-term obligations with current assets, improved from 0.39 in 2020 to 0.49 in 2021 but then declined to 0.46 in 2022 before dropping further to 0.39 in 2023 and significantly to 0.28 in 2024. These ratios suggest that the company may have difficulty meeting its current liabilities with its current assets.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, remained extremely low and stagnant at 0.00 from 2020 to 2024. This indicates that TXNM Energy may struggle to meet its short-term obligations even without considering inventory.

Similar to the quick ratio, the cash ratio, which measures the company's ability to cover its current liabilities with cash and cash equivalents, also stayed at a concerning 0.00 consistently from 2020 to 2024. This suggests that the company may have little to no cash readily available to meet its immediate financial needs.

Overall, TXNM Energy, Inc.'s liquidity ratios raise flags about its ability to efficiently manage its short-term financial obligations and maintain adequate cash reserves for unexpected expenses. These trends should be closely monitored by stakeholders to assess the company's liquidity risk.

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Additional liquidity measure

TXNM Energy, Inc.'s cash conversion cycle has shown fluctuations over the years based on the provided data. As of December 31, 2020, the company's cash conversion cycle was 41.42 days, indicating the time it takes for the company to convert its investments in inventory and other resources into cash. This metric improved to 30.11 days by December 31, 2021, suggesting a more efficient management of working capital.

By December 31, 2022, the cash conversion cycle further decreased to 21.45 days, signaling a more streamlined process in the company's operations. However, there was a notable increase in the cycle to 40.03 days by December 31, 2023, which may require attention to ensure efficient working capital management.

The most recent data, as of December 31, 2024, shows a significant increase in the cash conversion cycle to 89.86 days. This substantial rise may indicate potential challenges in converting investments into cash efficiently or managing working capital effectively.

Overall, it is essential for TXNM Energy, Inc. to monitor and analyze the fluctuations in the cash conversion cycle to identify areas for improvement and maintain optimal working capital management.