American States Water Company (AWR)

Short-term

Turnover ratios

American States Water Company's inventory turnover has decreased from 21.30 in 2020 to 13.22 in 2024. This indicates that it took less time to sell through its inventory in the past but has slowed down in recent years, possibly due to changes in demand or inventory management.

The receivables turnover ratio fluctuated over the years, ranging from 8.07 in 2021 to 10.30 in 2023. This ratio measures how efficiently the company collects on its credit sales. The increase in 2023 suggests improved efficiency in collecting receivables compared to previous years.

The payables turnover ratio declined from 2.88 in 2020 to 2.26 in 2024. This ratio reflects the speed at which the company pays its suppliers. A decreasing trend may indicate a longer payable period, which could be beneficial for cash flow management but may strain supplier relationships.

The working capital turnover was only available for 2020 and 2023, showing a value of 12.67 and 15.14, respectively. This ratio measures how efficiently the company utilizes working capital to generate sales. An increase in this ratio indicates a more effective utilization of working capital in generating revenue.

In conclusion, American States Water Company's activity ratios reflect varying levels of efficiency in managing inventory, collecting receivables, paying suppliers, and utilizing working capital over the years. A detailed analysis of these ratios can provide insights into the company's operational performance and financial management practices.

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Average number of days

American States Water Company's activity ratios show trends in the efficiency of managing inventory, collecting receivables, and paying suppliers over the years.

1. Days of Inventory on Hand (DOH):
- The DOH has increased from 17.14 days in 2020 to 27.61 days in 2024.
- This indicates that the company is holding onto inventory for a longer period, potentially tying up capital and indicating a slower turnover of goods.

2. Days of Sales Outstanding (DSO):
- DSO has fluctuated but shows a slight increase from 41.19 days in 2020 to 40.58 days in 2024.
- This suggests that the company is taking longer to collect payments from customers, which may impact cash flow and liquidity.

3. Number of Days of Payables:
- The number of days of payables increased significantly from 126.83 days in 2020 to 161.57 days in 2024.
- This indicates that the company is taking more time to pay its suppliers, potentially improving cash flow but also indicating strained supplier relationships or potential liquidity issues.

Overall, American States Water Company's activity ratios reflect trends that may require further analysis to understand the impact on the company's operational efficiency and financial health.

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Long-term

The fixed asset turnover ratio of American States Water Company has been relatively stable over the past five years, ranging from 0.28 to 0.32. This ratio indicates that the company generates approximately $0.28 to $0.32 in revenue for every dollar invested in fixed assets. The slight decrease in this ratio from 2020 to 2024 suggests that the company may be experiencing challenges in efficiently utilizing its fixed assets to generate revenue.

In terms of total asset turnover, American States Water Company has also shown consistency, with ratios between 0.24 and 0.27 over the same period. This ratio reflects the company's ability to generate sales in relation to its total assets. The stability of this ratio indicates that the company has maintained a steady level of sales relative to its total asset base.

Overall, the long-term activity ratios suggest that American States Water Company has been able to efficiently utilize both its fixed assets and total assets to generate revenue, although there may be some room for improvement in optimizing the use of fixed assets for revenue generation. This analysis provides valuable insights into the company's operational efficiency and asset utilization over the years.