Avista Corporation (AVA)

Short-term

Turnover ratios

1. Inventory Turnover:
- Avista Corp.'s inventory turnover has been fluctuating over the past five years, ranging from 4.39 to 6.83. In 2023, the ratio decreased compared to the previous year, indicating that the company took longer to sell its inventory. A lower turnover rate could suggest issues with inventory management or a change in sales patterns.

2. Receivables Turnover:
- The receivables turnover ratio for Avista Corp. has shown variability, with values ranging from 5.97 to 7.57. In 2023, the ratio increased to 7.12, indicating that the company collected its accounts receivable more efficiently compared to the previous year. This suggests effective management of credit sales and collection processes.

3. Payables Turnover:
- Avista Corp.'s payables turnover ratio has been relatively stable over the years, with values between 3.63 and 4.90. An increase in the ratio to 4.90 in 2023 implies that the company paid its suppliers more frequently during the year. This could be due to negotiated payment terms or changes in purchasing practices.

4. Working Capital Turnover:
- The working capital turnover ratio is not provided in the data. This ratio measures how efficiently a company utilizes its working capital to generate sales. Since there is no information available for this ratio, we cannot evaluate Avista Corp.'s efficiency in utilizing its working capital to generate revenue over the years.

Overall, analyzing these activity ratios provides insight into Avista Corp.'s operational efficiency in managing its inventory, receivables, and payables. fluctuations in these ratios can indicate potential strengths or weaknesses in the company's management of resources and relationships with suppliers and customers.

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Average number of days

Activity ratios such as days of inventory on hand (DOH), days of sales outstanding (DSO), and number of days of payables provide insights into how efficiently a company manages its resources and its cash conversion cycle.

Looking at Avista Corp.'s activity ratios over the past five years, we can observe the following trends:
1. Days of inventory on hand (DOH) have increased significantly from 53.41 days in 2019 to 83.14 days in 2023. This suggests that Avista Corp. is holding onto its inventory for a longer period, which could indicate potential inefficiencies in inventory management or challenges in aligning production with demand.
2. Days of sales outstanding (DSO) have fluctuated over the years but have shown a slight increase from 48.20 days in 2019 to 51.26 days in 2023. A higher DSO indicates that Avista Corp. is taking longer to collect its accounts receivable, which may lead to cash flow constraints.
3. The number of days of payables has also varied but has generally been consistent around the 90-day mark. A lower number of days of payables suggests that Avista Corp. is paying its suppliers more quickly, potentially impacting cash flow management.

Overall, these activity ratios indicate that Avista Corp. may need to focus on improving its inventory management practices to reduce the days of inventory on hand, optimizing its accounts receivable collection processes to lower DSO, and potentially negotiating more favorable payment terms with suppliers to optimize cash flow.

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Long-term

The fixed asset turnover ratio for Avista Corp. has remained relatively stable over the past five years, ranging between 0.26 to 0.31. This indicates that Avista is generating approximately 0.26 to 0.31 in revenue for every dollar invested in fixed assets.

On the other hand, the total asset turnover ratio has also remained consistent, fluctuating between 0.21 to 0.23 during the same period. This suggests that Avista is generating around 0.21 to 0.23 in revenue for every dollar invested in total assets.

Overall, both the fixed asset turnover and total asset turnover ratios reflect stable operational efficiency in utilizing assets to generate revenue over the past five years. The relatively consistent ratios indicate that Avista is effectively managing its assets to generate sales revenue.