Black Hills Corporation (BKH)

Short-term

Turnover ratios

Based on the provided data, we can analyze the activity ratios of Black Hills Corporation as follows:

1. Inventory Turnover: The inventory turnover ratio indicates how efficiently the company is managing its inventory. From March 31, 2020, to December 31, 2024, there were fluctuations in the inventory turnover ratio, ranging from negative values to positive values. Generally, a higher turnover ratio is preferred as it implies that the company is selling its inventory more quickly.

2. Receivables Turnover: The receivables turnover ratio measures how quickly the company is collecting its receivables. Similar to inventory turnover, the receivables turnover ratio also fluctuated over the period. Companies typically aim for a higher turnover ratio, as it indicates faster collection of receivables.

3. Payables Turnover: The payables turnover ratio shows how quickly the company is paying its suppliers. Black Hills Corporation's payables turnover ratio also varied during the period under consideration. A higher turnover ratio suggests that the company is managing its payables efficiently.

4. Working Capital Turnover: The working capital turnover ratio reflects how effectively the company is utilizing its working capital to generate sales. The data provided shows that this ratio was not available for several periods but indicated values for specific dates. A higher turnover ratio indicates that the company is efficiently using its working capital.

Overall, analyzing these activity ratios provides insight into how well Black Hills Corporation is managing its inventory, receivables, payables, and working capital to generate revenue and sustain operations.

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Average number of days

The activity ratios of Black Hills Corporation provide insights into the management of its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
- The DOH measures how many days it takes for the company to sell its inventory.
- Black Hills Corporation's DOH fluctuated over the years, ranging from around 164.54 days to 1,192.72 days for the period analyzed.
- A high DOH can indicate slow-moving inventory or overstocking, which may tie up capital and increase holding costs.
- In the recent period, the DOH decreased to 240.85 days, suggesting improved efficiency in managing inventory.

2. Days of Sales Outstanding (DSO):
- DSO represents the average number of days it takes for the company to collect its accounts receivable.
- Black Hills Corporation showed variations in DSO, with values ranging from 45.15 days to 90.78 days during the period under review.
- A decreasing trend in DSO indicates that the company is collecting payments faster or managing credit effectively.
- The DSO decreased to 54.34 days in the latest period, indicating an improvement in collection efficiency.

3. Number of Days of Payables:
- This ratio shows the number of days it takes for the company to pay its suppliers.
- Black Hills Corporation's days of payables ranged from 181.89 days to 1,588.45 days during the period analyzed.
- A higher days of payables may signify a favorable credit arrangement with suppliers, but could also indicate potential cash flow issues.
- The days of payables decreased to 244.94 days in the most recent period, suggesting a more balanced approach to managing payables.

Overall, the analysis of Black Hills Corporation's activity ratios indicates fluctuations in inventory management, receivables collection efficiency, and payment practices over the period examined. Monitoring and improving these ratios can help the company optimize its working capital and operational efficiency.

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Long-term

The fixed asset turnover ratio for Black Hills Corporation has shown a gradual increase from 0.30 in March 2020 to 0.28 by December 2024, indicating the efficiency of the company in generating sales from its fixed assets. The ratio reached its peak of 0.39 in March 2023 before experiencing a slight decline.

On the other hand, the total asset turnover ratio has been relatively stable, hovering around 0.21 to 0.27 during the same period. This ratio measures the company's ability to generate sales relative to its total assets. The highest point was seen in December 2022 at 0.27, whereas it reached the lowest point of 0.21 multiple times between December 2020 and June 2024.

Overall, the fixed asset turnover ratio demonstrates an improving trend, indicating better utilization of the company's fixed assets to drive sales, while the total asset turnover ratio has remained fairly steady over the years, reflecting consistent efficiency in generating sales relative to total assets.