Part 7: INDUSTRY BACKGROUND CMS Energy provides electric service to approximately 1.

7 million customers and serves 275 cities and villages in 61 counties. Battle Creek, Flint, Grand Rapids,

Kalamazoo and Muskegon are among the largest cities served.

CMS Energy is a leader in developing renewable energy programs in Michigan. Its Green Generation initiative is the largest renewable energy programs in Michigan. CMS Energy also provides natural gas service for heating and other uses to approximately 1.7 million customers in 54 of the 68 counties in Michigans Lower Peninsula. The company has one of the largest underground natural gas storage capacities in the country. This allows the company to economically purchase and store gas during warm months, for eventual use in the winter heating season.

DTE Energy is a competitor of CMS Energy. DTE is a Detroit, Michigan based utility incorporated in 1995 involved in the development and management of energy-related businesses and services nationwide. DTE Energys largest operating subsidiaries are Detroit Edison, an investor owned electric utility serving 2.1 million customers in Southeastern Michigan, and Michigan Consolidated Gas Co. (MichCon) a natural gas utility serving 1.2 million customers in Michigan.

Renewable Energy could provide higher margins and revenue growth.

Global

initiatives to fight global warming are causing many countries to subsidize and otherwise encourage the growth of renewable energy. The use of wind turbines and other

turbines and other alternative energy sources should allow large diverse companies to

benefit greatly from the advance technologies and economies of scale needed to contribute to renewable energy.

Retrieved from http://www.wikiwealth.com/swot-opportunity:renewable-energy

PART 8: OPERATING ACTIVITIES

INCOME STATEMENT

2011

2012

SALES REVENUE

6.5 B

6.25

COGS (COST OF GOODS SOLD)

4.06 B

5B

OPERATING EXPENSES

144B

229M

INCOME TAXES

191M

245M

NET INCOME (LOSS)

413M

375M

EARNINGS PER SHARE

1.66

1.46

CMS Energy had income from discontinued operations. In 2011 it was 2 million and in 2012 it was 7 million. The financial statement does not go into detail about what caused this income.

According to the Cash Flows Statement the cash flow from operating activities in 2011 was 1.17 billion and 1.24 billion in 2012. This is a difference of a .7 billion dollar increase for 2012.

Information retrieved from www.yahoofinance.com

Income from continuing operations was 1.08 billion in 2011 and 1.4 billion in 2012. This is a difference of .32 billion dollar increase for 2012. As the company continues to operate and grow so does the amount in which to operate the company.

CMS ENERGY BALANCE SHEET COMPARISON

2011

2012

ALLOWANCE FOR BAD DEBT

35M

32M

BALANCE IN ACC REC (NET)

918M

906M

BALANCE IN INVENTORY

1.19B

1.08B

BALANCE IN INCOME TAXES PAYABLE

282M

68M

BALANCE IN DEFERRED INCOME TAX

108B

43M

The accounting method used by CMS Energy is the generally accepted accounting principles (U.S. GAAP) and the International financial reporting standards (IFRS).

There was no information available to indicate any LIFO reserves or liquidations disclosed in the footnotes of my financial statements.

PART 9: ANALYSIS OF OPERATING ACTIVITIES

2011

2012

GROSS PROFIT MARGIN

5.87

5.45

OPERATING PROFIT MARGIN

0.15

4.16

NET PROFIT MARGIN

6.4

6.0

RECEIVABLES TURNOVER

4.15

4.58

ASSET TURNOVER

2.53

2.58

RATE OF RETURN

11.95

Based on the information in the financial documents CMS Energy has continued to show progress over the year. Each year the operating expenses stay relatively close to the previous year amounts. The liabilities stay relatively close to the previous year as well. The revenue continues to increase. There is not a huge jump in the amount of revenue but steady progress is a step in the right direction. CMS energy continues to expand in the areas in which they service.