Chesapeake Utilities Corporation (CPK)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.59 | 3.19 | 3.82 | 6.47 | 5.62 |
| Receivables turnover | 8.87 | 10.40 | 7.51 | 7.00 | 6.89 |
| Payables turnover | 1.57 | 1.69 | 1.79 | 1.49 | 1.60 |
| Working capital turnover | — | — | — | — | — |
The activity ratios of Chesapeake Utilities Corp reflect the company's efficiency in managing its assets and liabilities over the past five years.
1. Inventory turnover:
- The inventory turnover ratio measures how effectively the company is able to sell its inventory during a specific period.
- Chesapeake Utilities Corp's inventory turnover has fluctuated over the years, ranging from a high of 12.99 in 2019 to a low of 6.38 in 2023.
- A higher inventory turnover indicates that the company is selling its inventory quickly, which is generally favorable for liquidity and profitability.
2. Receivables turnover:
- The receivables turnover ratio evaluates how efficiently the company collects payments from its customers.
- Chesapeake Utilities Corp's receivables turnover has also varied over the years, with a peak of 7.19 in 2022 and a low of 5.30 in 2019.
- A higher receivables turnover implies that the company is collecting payments promptly, which can improve cash flow and reduce the risk of bad debts.
3. Payables turnover:
- The payables turnover ratio assesses how efficiently the company pays its suppliers.
- Chesapeake Utilities Corp's payables turnover ratio has seen fluctuations, with a high of 4.24 in 2022 and a low of 2.29 in 2020.
- A higher payables turnover suggests that the company is managing its payables well, potentially benefiting from trade credit terms and maintaining good relationships with suppliers.
4. Working capital turnover:
- The working capital turnover ratio measures how efficiently the company generates revenue relative to its working capital.
- Unfortunately, the data provided does not include the working capital turnover for Chesapeake Utilities Corp, making it difficult to assess the company's efficiency in utilizing its working capital.
In conclusion, Chesapeake Utilities Corp's activity ratios indicate varying levels of efficiency in managing inventory, receivables, and payables over the past five years. Monitoring these ratios can provide insights into the company's operational performance and financial health.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 101.66 | 114.42 | 95.63 | 56.45 | 64.91 |
| Days of sales outstanding (DSO) | days | 41.16 | 35.08 | 48.63 | 52.17 | 52.98 |
| Number of days of payables | days | 232.21 | 215.68 | 203.92 | 244.68 | 227.41 |
Chesapeake Utilities Corp's activity ratios, which measure the efficiency of the company's operations, provide insight into its inventory management, accounts receivable collection, and accounts payable payment practices.
The Days of Inventory on Hand (DOH) have increased over the past five years, indicating that the company is holding onto its inventory for a longer period before selling it. This may suggest inefficiencies in inventory management or challenges in selling products quickly.
The Days of Sales Outstanding (DSO) have fluctuated over the years but have generally shown improvement from 2021 to 2023. This indicates that the company is collecting its accounts receivable more efficiently, converting sales into cash more rapidly.
The Number of Days of Payables demonstrates the number of days the company takes to pay its suppliers. The significant variability in this ratio from year to year suggests fluctuations in the company's payment practices. A decreasing number of days indicates that the company is taking longer to pay its suppliers, potentially benefiting from extended credit terms.
Overall, Chesapeake Utilities Corp should focus on optimizing its inventory management to reduce the DOH, maintaining efficient accounts receivable collection to keep DSO low, and managing payables effectively to ensure a balanced approach to working capital management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.27 | 0.38 | 0.33 | 0.30 | 0.33 |
| Total asset turnover | 0.20 | 0.31 | 0.27 | 0.25 | 0.27 |
Chesapeake Utilities Corp's long-term activity ratios have shown fluctuating trends over the past five years. The fixed asset turnover, which measures the efficiency of utilizing fixed assets to generate revenue, has decreased from 0.33 in 2021 to 0.27 in 2023. This indicates a decline in the company's ability to generate sales relative to its investment in fixed assets.
Similarly, the total asset turnover, reflecting the company's efficiency in utilizing all assets to generate revenue, has also been on a downward trend from 0.27 in 2021 to 0.20 in 2023. This suggests that Chesapeake Utilities Corp is becoming less effective in generating sales compared to its total asset base.
Overall, the declining trends in both fixed asset turnover and total asset turnover ratios may indicate potential inefficiencies in the company's asset utilization and revenue generation processes, which could impact its long-term profitability and operational performance. Further investigation into the reasons behind these declining ratios and potential strategic adjustments may be warranted to improve the company's long-term efficiency and financial performance.