TXNM Energy, Inc. (TXNM)

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 89.86 63.29 54.90 48.63 40.03 26.97 21.77 15.75 16.07 17.08 22.15 24.71 27.04 33.77 43.09 43.46 47.85 50.73 52.92 57.76
Days of sales outstanding (DSO) days — — — — — — — — — 42.83 41.58 31.86 38.12 45.17 44.72 35.46 41.84 49.55 42.53 33.76
Number of days of payables days — — — — — — — — — 33.58 38.16 41.43 71.73 56.65 89.19 77.38 121.97 63.70 57.68 74.18
Cash conversion cycle days 89.86 63.29 54.90 48.63 40.03 26.97 21.77 15.75 16.07 26.33 25.57 15.14 -6.57 22.29 -1.38 1.54 -32.29 36.57 37.78 17.34

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 89.86 + — – —
= 89.86

TXNM Energy, Inc.'s cash conversion cycle shows fluctuations over the periods mentioned. The cycle reflects the time it takes for the company to convert its investments in raw materials into cash from sales. A shorter cycle indicates efficiency in managing working capital, while a longer cycle may suggest inefficiencies or delays in converting investments into cash.

From March 31, 2020, to June 30, 2022, the company experienced positive cash conversion cycles, indicating timely collection of receivables and effective management of inventory and payables. However, from September 30, 2022, to December 31, 2024, the cash conversion cycle increased significantly, peaking at 89.86 days by the end of December 31, 2024. This upward trend suggests potential challenges in managing working capital efficiently and delays in cash generation.

Analyzing the data, TXNM Energy, Inc. may need to focus on improving its cash conversion cycle by streamlining its operations, enhancing inventory turnover, and optimizing accounts receivable and payable processes. Proactive management of working capital is crucial for sustaining liquidity and financial health in the long term.