California Water Service Group (CWT)

Short-term

Turnover ratios

Inventory turnover for California Water Service Group has been declining over the past five years, from 31.48 in 2019 to 16.67 in 2023. This indicates that the company is selling its inventory at a slower rate relative to previous years.

Receivables turnover has also shown a downward trend over the same period, decreasing from 5.99 in 2019 to 4.49 in 2023. This suggests that the company is taking longer to collect payments from its customers.

On the other hand, payables turnover has been relatively stable, ranging from 1.71 in 2023 to 2.25 in 2019. This could imply that the company is managing its payments to suppliers consistently.

The working capital turnover ratio is not available for all years in the table, but it indicates significant fluctuations in how efficiently the company is using its working capital to generate revenue.

Overall, these activity ratios reveal insights into how effectively California Water Service Group is managing its inventory, receivables, payables, and working capital to support its operations and business activities.

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Average number of days

The activity ratios of California Water Service Group indicate a mixed trend over the past five years.

1. Days of Inventory on Hand (DOH):
- The DOH has shown an increasing trend from 11.59 days in 2019 to 21.90 days in 2023. This suggests that the company is holding inventory for a longer period before it is sold.
- An increasing DOH could be indicative of aging or excess inventory, which may tie up capital and potentially lead to obsolescence or higher carrying costs.

2. Days of Sales Outstanding (DSO):
- The DSO has fluctuated over the years, from 60.96 days in 2019 to 87.96 days in 2021, decreasing to 81.31 days in 2023.
- A higher DSO indicates that the company takes a longer time to collect its accounts receivable, which could impact cash flow and liquidity.

3. Number of Days of Payables:
- The number of days of payables has shown an increasing trend from 162.37 days in 2019 to 213.06 days in 2023.
- A higher number of days of payables may indicate that the company is taking longer to pay its creditors, which could potentially strain supplier relationships if not managed effectively.

Overall, the activity ratios suggest that California Water Service Group is taking longer to manage its inventory, collect receivables, and pay its suppliers. It is important for the company to closely monitor these ratios and work towards optimizing its working capital management to ensure efficient operations and sustainable growth.

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Long-term

The long-term activity ratios of California Water Service Group indicate the efficiency with which the company utilizes its fixed assets and total assets to generate revenue over the years. The fixed asset turnover ratio has been declining gradually from 0.30 in 2019 to 0.21 in 2023, suggesting a decrease in the company's ability to generate sales relative to its investment in fixed assets. This trend may signal inefficiencies in the utilization of long-term assets or increased capital investment without proportionate revenue growth.

Similarly, the total asset turnover ratio has also exhibited a downward trend, decreasing from 0.23 in 2019 to 0.17 in 2023. This indicates that the company's overall efficiency in generating revenue from its total assets has declined over the years. A lower total asset turnover ratio may result from factors such as excess inventory, unproductive assets, or declining sales relative to the asset base.

Overall, the decreasing trend in both fixed asset turnover and total asset turnover ratios suggests that California Water Service Group may need to review its asset utilization strategies and operational efficiency to improve long-term profitability and maximize returns on its assets. Further analysis of the factors contributing to these declining ratios would be essential in identifying opportunities for performance improvement and sustainable growth.