Atmos Energy Corporation (ATO)

Short-term

Turnover ratios

Based on the provided data for Atmos Energy Corporation's activity ratios over multiple periods, several insights can be drawn:

1. Inventory Turnover:
- The inventory turnover ratio has fluctuated over the periods, indicating changes in the efficiency of managing inventory levels.
- There was a notable increase in inventory turnover from Dec 31, 2020, to Sep 30, 2021, suggesting a more efficient inventory management during that period.
- The ratio peaked at 18.11 on Mar 31, 2021, which indicates that inventory was turned over approximately 18 times during that period.

2. Receivables Turnover:
- The receivables turnover ratio also shows variability across the periods, reflecting the effectiveness of collecting receivables.
- The ratio reached its highest level of 13.33 on Jun 30, 2023, implying that receivables were collected and replaced about 13 times during that period.
- There was a significant decrease in the ratio from Jun 30, 2023, to Sep 30, 2023, indicating a potential issue with collecting receivables efficiently during that period.

3. Payables Turnover:
- Unfortunately, data for the payables turnover ratio is missing from the table, making it challenging to assess the efficiency of paying off trade payables.

4. Working Capital Turnover:
- The working capital turnover ratio exhibits significant variations, suggesting changes in the efficiency of utilizing working capital to generate sales.
- There are periods where the ratio is not provided (indicated by dashes), potentially due to missing data points or specific industry characteristics.
- Notably, on Jun 30, 2022, the working capital turnover ratio spiked to 178.07, indicating a substantial increase in sales generated per unit of working capital.

Overall, the analysis of Atmos Energy Corporation's activity ratios reveals fluctuations in efficiency and effectiveness in managing inventory, collecting receivables, and utilizing working capital to generate sales over the examined periods. Further analysis and comparison with industry benchmarks may provide deeper insights into the company's operational performance.

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Average number of days

Atmos Energy Corporation's activity ratios indicate how efficiently the company manages its working capital and inventory.

1. Days of Inventory on Hand (DOH): This ratio shows how many days, on average, it takes for the company to sell its inventory. A decreasing trend in DOH is generally considered positive as it indicates faster inventory turnover. However, Atmos Energy's DOH has been fluctuating over the periods, ranging from a low of 20.16 days to a high of 77.64 days. This inconsistency suggests fluctuations in inventory management efficiency.

2. Days of Sales Outstanding (DSO): DSO measures how long it takes the company to collect payments from its customers. A lower DSO is indicative of faster cash collection. Atmos Energy's DSO has varied significantly, ranging from 27.38 days to 64.55 days. The fluctuating DSO may indicate variability in the company's credit policies or customer payment behaviors.

3. Number of Days of Payables: The data provided does not include the number of days of payables, which limits the comprehensive analysis of the company's complete cash conversion cycle.

In conclusion, Atmos Energy Corporation's activity ratios exhibit fluctuating trends, suggesting potential challenges in managing inventory turnover and accounts receivable collection efficiently. Further evaluation and comparison with industry benchmarks could provide more insights into the company's operational effectiveness.

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Long-term

Atmos Energy Corporation's long-term activity ratios have shown consistency in recent quarters. The fixed asset turnover ratio has ranged between 0.21 and 0.26 over the past two years, indicating that the company generates revenue efficiently from its fixed assets. The slight fluctuations in this ratio may be attributed to changes in the company's investment in fixed assets.

The total asset turnover ratio has remained relatively stable, ranging between 0.16 and 0.21 over the same period. This indicates that Atmos Energy efficiently utilizes its total assets to generate revenue. The company's ability to maintain a consistent total asset turnover ratio suggests operational stability and effective asset management.

Overall, the long-term activity ratios of Atmos Energy Corporation reflect a steady performance in terms of asset utilization and revenue generation efficiency. Continued monitoring of these ratios can provide insights into the company's operational efficiency and its ability to effectively manage its assets.