Chesapeake Utilities Corporation (CPK)

Short-term

Turnover ratios

The activity ratios for Chesapeake Utilities Corp provide insights into how efficiently the company manages its inventory, receivables, and payables.

Inventory turnover has shown some fluctuations over the quarters, ranging from 6.38 to 9.24. This ratio indicates the number of times inventory is sold and replaced during a specific period. A higher turnover generally implies effective management of inventory levels and faster conversion of inventory into sales.

Receivables turnover has also varied, with values between 6.20 and 10.74. This ratio reflects how quickly the company collects payments from customers. A higher turnover is typically favorable as it suggests a shorter collection period and efficient credit management.

Payables turnover has ranged from 2.79 to 6.93, showing variability in how quickly the company pays its suppliers. A higher turnover indicates that the company is paying its suppliers more efficiently, potentially benefiting from favorable credit terms.

The working capital turnover is not available in the provided data. This ratio measures how effectively the company utilizes its working capital to generate sales. A higher turnover signifies that the company efficiently leverages its working capital to support operations and drive revenue.

Overall, analyzing these activity ratios helps assess Chesapeake Utilities Corp's operational efficiency and effectiveness in managing its resources to support business activities and generate revenue.

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Average number of days

The activity ratios for Chesapeake Utilities Corp indicate the efficiency of the company in managing its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH): This ratio has shown some fluctuations over the quarters, ranging from 35.92 days to 57.19 days. Generally, a lower DOH is preferred as it indicates that the company is able to sell its inventory faster. Chesapeake Utilities Corp's DOH has increased in the latest quarter, suggesting a buildup in inventory levels which may tie up resources.

2. Days of Sales Outstanding (DSO): The DSO ratio measures the average number of days it takes for the company to collect payment after a sale is made. Chesapeake Utilities Corp has shown variability in DSO, with values ranging from 33.97 days to 58.90 days. A lower DSO is desirable as it indicates faster collection of receivables. The company's DSO has increased in the latest quarter, which may signal issues with collection efficiency.

3. Number of Days of Payables: This ratio represents how long a company takes to pay its suppliers. A higher number of days of payables indicates that the company is taking longer to settle its payables. Chesapeake Utilities Corp's days of payables have fluctuated, ranging from 52.63 days to 130.64 days. A longer period of payables may positively impact cash flow as the company holds onto funds longer.

In conclusion, Chesapeake Utilities Corp should closely monitor its activity ratios to ensure efficient management of inventory, receivables, and payables. Efforts should be made to optimize inventory levels, improve collections on outstanding invoices, and manage payables effectively to maintain healthy cash flow and operational efficiency.

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Long-term

Long-term activity ratios provide insights into how efficiently a company utilizes its assets in generating revenue. In the case of Chesapeake Utilities Corp, based on the data provided from Q1 2022 to Q4 2023, we can observe the following trends:

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how effectively a company generates sales with its fixed assets.
- Chesapeake Utilities Corp's fixed asset turnover has shown a gradual decline from Q1 2022 to Q4 2023, decreasing from 0.34 to 0.27.
- This declining trend may indicate that the company's fixed assets are not being used as efficiently to generate revenue as they were in the previous quarters.

2. Total Asset Turnover:
- The total asset turnover ratio reflects how well a company utilizes all its assets to generate sales.
- Chesapeake Utilities Corp's total asset turnover has also been decreasing slightly over the quarters, from 0.29 in Q1 2022 to 0.20 in Q4 2023.
- This declining trend suggests that the company may be experiencing challenges in utilizing its total assets to generate sales efficiently.

In summary, the long-term activity ratios of Chesapeake Utilities Corp, as indicated by the fixed asset turnover and total asset turnover, show a decreasing trend over the quarters analyzed. This may raise concerns about the company's ability to optimize the use of its assets to generate revenue effectively. Further investigation into the factors contributing to these declining ratios could provide valuable insights into the company's operational efficiency and future prospects.