CenterPoint Energy Inc (CNP)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 1.05 | 1.12 | 1.30 | 1.22 | 1.09 | 1.09 | 1.54 | 1.90 | 1.60 | 1.55 | 2.09 | 2.47 | 2.27 | 4.22 | 6.57 | 10.29 | 8.90 | 9.56 | 11.40 | 14.37 |
| Receivables turnover | 6.59 | 7.86 | 9.81 | 7.30 | 5.57 | 8.20 | 7.96 | 6.23 | 6.94 | 8.46 | 7.97 | 6.49 | 5.87 | 7.69 | 8.54 | 7.75 | 4.52 | 5.49 | 5.68 | 5.18 |
| Payables turnover | 0.88 | 1.19 | 1.14 | 1.02 | 0.71 | 0.94 | 0.95 | 0.94 | 0.81 | 1.02 | 1.15 | 1.17 | 1.33 | 3.43 | 4.53 | 5.22 | 5.50 | 6.16 | 5.84 | 4.51 |
| Working capital turnover | — | — | — | — | — | — | 70.16 | — | 2.72 | 2.53 | 4.40 | — | — | — | — | 71.42 | — | — | 27.68 | 34.51 |
Based on the activity ratios of Centerpoint Energy Inc., we can observe the following trends:
1. Inventory Turnover: This ratio measures how effectively the company is managing its inventory. The ratio has shown some variability over the quarters but generally ranges between 2.81 to 4.87. A higher turnover indicates that the company is selling its inventory quickly. In Q2 2022, the inventory turnover was the highest at 4.16, suggesting efficient inventory management.
2. Receivables Turnover: This ratio indicates how quickly the company collects on its credit sales. The receivables turnover has fluctuated between 5.57 to 9.81 over the quarters, with higher values indicating faster collection. Q2 2023 had the highest turnover at 9.81, signaling effective accounts receivable management.
3. Payables Turnover: The payables turnover ratio reflects how quickly the company is paying its suppliers. Centerpoint Energy Inc. has displayed a range of 2.29 to 3.59 in this ratio. A higher turnover implies the company is managing its payables efficiently. Q3 2023 showed the highest turnover at 3.59, indicating prompt payment to suppliers.
4. Working Capital Turnover: Unfortunately, there is no data available for working capital turnover for the recent quarters. However, in Q2 2022, the company had a notably high working capital turnover of 70.16, suggesting that the company efficiently utilized its working capital during that period.
In conclusion, Centerpoint Energy Inc. has shown varying levels of efficiency in managing its inventory, receivables, and payables over the quarters, with some quarters demonstrating better performance in terms of activity ratios. It is important for the company to maintain a balance in these ratios to ensure optimal working capital utilization and cash flow management.
Average number of days
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 347.40 | 325.61 | 279.79 | 298.50 | 333.41 | 334.30 | 237.36 | 192.46 | 228.31 | 235.52 | 174.95 | 147.64 | 160.79 | 86.47 | 55.56 | 35.46 | 41.01 | 38.19 | 32.01 | 25.40 |
| Days of sales outstanding (DSO) | days | 55.40 | 46.45 | 37.22 | 50.00 | 65.51 | 44.50 | 45.86 | 58.58 | 52.62 | 43.17 | 45.78 | 56.26 | 62.15 | 47.44 | 42.72 | 47.09 | 80.74 | 66.48 | 64.21 | 70.48 |
| Number of days of payables | days | 413.73 | 306.71 | 319.33 | 356.97 | 514.58 | 389.64 | 385.53 | 389.43 | 449.12 | 359.44 | 316.89 | 312.13 | 274.31 | 106.55 | 80.58 | 69.88 | 66.39 | 59.29 | 62.55 | 80.84 |
The activity ratios of Centerpoint Energy Inc. provide insight into the efficiency with which the company manages its inventory, collects its receivables, and pays its payables.
1. Days of Inventory on Hand (DOH): This ratio indicates the number of days it takes for the company to sell its entire inventory. Centerpoint Energy Inc. experienced an increasing trend in DOH from Q1 2022 to Q4 2022, which suggests slower inventory turnover during that period. However, the trend reversed from Q1 2023 to Q4 2023, indicating improved efficiency in managing inventory.
2. Days of Sales Outstanding (DSO): DSO measures the average number of days it takes for the company to collect its accounts receivable. Centerpoint Energy Inc. showed fluctuations in DSO over the periods analyzed, with the highest value in Q4 2022 and the lowest in Q2 2023. A lower DSO is generally favorable as it indicates faster cash collection.
3. Number of Days of Payables: This ratio represents the average number of days it takes for the company to pay its suppliers. Centerpoint Energy Inc. demonstrated variability in the number of days of payables, with the lowest value in Q3 2023 and the highest in Q4 2022. A longer period of payables may suggest better cash flow management but could also indicate strained relationships with suppliers.
In summary, Centerpoint Energy Inc. should aim to optimize its inventory turnover, reduce its DSO, and effectively manage its payables to enhance operational efficiency and cash flow management.
Long-term
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 0.29 | 0.32 | 0.33 | 0.34 | 0.34 | 0.34 | 0.35 | 0.35 | 0.36 | 0.36 | 0.36 | 0.34 | 0.33 | 0.40 | 0.40 | 0.42 | 0.43 | 0.42 | 0.46 | 0.50 |
| Total asset turnover | 0.22 | 0.24 | 0.24 | 0.25 | 0.24 | 0.24 | 0.24 | 0.24 | 0.22 | 0.22 | 0.22 | 0.22 | 0.22 | 0.26 | 0.27 | 0.26 | 0.25 | 0.25 | 0.27 | 0.29 |
Centerpoint Energy Inc.'s long-term activity ratios show its efficiency in utilizing its fixed assets and total assets to generate revenue. The fixed asset turnover ratio has been relatively stable over the past eight quarters, ranging from 0.29 to 0.35. This indicates that, on average, the company generates $0.29 to $0.35 in revenue for every dollar invested in fixed assets. Although there has been some fluctuation, the ratio has not shown any consistent upward or downward trend.
In comparison, the total asset turnover ratio has also remained relatively consistent, fluctuating between 0.22 and 0.25 over the same period. This ratio reflects the company's ability to generate revenue from all of its assets, including fixed and current assets. The stability of the total asset turnover ratio suggests that Centerpoint Energy Inc. has been able to efficiently utilize its entire asset base to generate revenue.
Overall, the long-term activity ratios of Centerpoint Energy Inc. indicate that the company has been effectively managing its assets to generate revenue consistently over the past two years. Further analysis may be needed to understand any underlying factors influencing these ratios and to evaluate the company's overall operational efficiency and asset management strategies.