Consolidated Communications (CNSL)

Short-term

Turnover ratios

Inventory turnover could not be calculated based on the provided data.

Receivables turnover for Consolidated Communications Holdings Inc has ranged from 8.95 to 10.89 over the past five years, indicating that the company has been able to collect its accounts receivable approximately 9 to 11 times a year on average. This shows efficient management of credit sales and prompt collection of receivables.

Payables turnover has varied significantly from 8.52 to 22.17 over the same period, which suggests that the company is taking longer or shorter to pay its suppliers. A high payables turnover can indicate that the company is paying its suppliers quickly, potentially benefiting from early payment discounts, while a lower turnover may indicate a more extended payment period.

Working capital turnover was not available for 2023 and 2019, but in the years where data is present, the company has shown a decreasing trend from 18.58 to 3.60. This could imply that the company is generating less revenue relative to its working capital, which may indicate inefficiencies in managing working capital resources.

Overall, the analysis of Consolidated Communications Holdings Inc's activity ratios suggests that the company has been proficient in collecting receivables, but there may be areas for improvement in managing inventory and working capital efficiently.

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Average number of days

Days of Sales Outstanding (DSO) measures how long, on average, it takes for Consolidated Communications Holdings Inc to collect its accounts receivable. The trend shows an increase in DSO from 2019 to 2023, indicating a reduction in the efficiency of collecting payments from customers. This may lead to potential cash flow issues if not managed effectively.

Days of Payables highlights the average number of days it takes for the company to pay its suppliers. The data indicates an increase in the number of days from 2019 to 2023, suggesting that the company is taking longer to settle its payables. While this may provide a short-term benefit in cash management, it could strain relationships with suppliers if extended payment terms are not negotiated effectively.

Days of Inventory on Hand (DOH) data is lacking in the provided table, making it difficult to assess the efficiency of inventory management for Consolidated Communications Holdings Inc. Without this information, it is challenging to gauge the company's ability to control inventory levels and the potential risk of obsolete or excess inventory.

In conclusion, the analysis of activity ratios for Consolidated Communications Holdings Inc indicates potential inefficiencies in accounts receivable collection and an increase in days of payables. Monitoring and managing these ratios effectively are crucial for maintaining healthy working capital levels and sustaining relationships with both customers and suppliers.

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Long-term

Consolidated Communications Holdings Inc's long-term activity ratios, specifically the fixed asset turnover and total asset turnover, provide valuable insights into the company's efficiency in utilizing its assets to generate revenue.

1. Fixed Asset Turnover:
The fixed asset turnover ratio measures how efficiently a company generates revenue from its fixed assets. A lower ratio indicates that the company is generating less revenue for each dollar invested in fixed assets, which may suggest underutilization or inefficiency in managing these assets. Consolidated Communications' fixed asset turnover has been declining over the past five years, from 0.73 in 2019 to 0.45 in 2023. This downward trend indicates a decreasing effectiveness in generating revenue from its fixed assets over time. It is essential for the company to address this decline and explore strategies to improve the utilization of its fixed assets to enhance overall operational efficiency.

2. Total Asset Turnover:
The total asset turnover ratio reflects how well a company efficiently utilizes all its assets to generate sales. A lower total asset turnover indicates that the company is less efficient in converting its assets into revenue. Consolidated Communications' total asset turnover has remained relatively stable around 0.31 to 0.39 from 2019 to 2023. Although the ratio has not shown significant fluctuations, it is notably lower compared to some industry benchmarks, indicating room for improvement in optimizing the use of all its assets to drive revenue growth.

In conclusion, Consolidated Communications Holdings Inc should focus on enhancing its efficiency in utilizing both fixed and total assets to improve its long-term activity ratios. By implementing strategies to better leverage its assets and generate higher revenue, the company can enhance its overall operational performance and financial health in the long run.