DTE Energy Company (DTE)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 0.99 | 1.03 | 1.19 | 9.79 | 11.78 |
| Receivables turnover | 7.13 | 8.81 | 8.18 | 6.80 | 6.71 |
| Payables turnover | 0.77 | 0.60 | 0.72 | 1.05 | 0.81 |
| Working capital turnover | — | — | — | 15.09 | — |
1. Inventory Turnover: The inventory turnover ratio for DTE Energy Co. has shown fluctuation over the past five years. In 2023, the ratio increased to 5.94 compared to no inventory turnover in 2022. This suggests that the company was able to sell its inventory almost six times during the year, indicating efficient inventory management. However, the ratio was significantly higher in 2021 at 10.73, showing even better inventory turnover efficiency.
2. Receivables Turnover: DTE Energy Co. has maintained a relatively stable receivables turnover ratio over the past five years. The ratio was highest in 2022 at 8.81 and lowest in 2019 at 6.71. Comparing 2023 to the previous years, the company collected its receivables 7.13 times during the year. A high turnover ratio indicates that the company is efficient in collecting outstanding payments from its customers.
3. Payables Turnover: The payables turnover ratio for DTE Energy Co. has also shown fluctuations. In 2023, the ratio was 4.60, indicating the company paid its creditors approximately 4.6 times during the year. Similar to inventory turnover, there was no payables turnover in 2022. The highest ratio was observed in 2021 at 6.51. A higher payables turnover ratio could imply that the company is managing its payables efficiently.
4. Working Capital Turnover: The working capital turnover ratio is not provided for most of the years, except for 2020. The ratio in 2020 stood at 15.09, indicating that DTE Energy Co. generated revenues 15 times the amount of its working capital. This suggests effective utilization of working capital to drive sales.
Overall, analyzing these activity ratios provides insights into DTE Energy Co.'s efficiency in managing its inventory, receivables, payables, and working capital to drive its operational performance and financial health. The fluctuations in these ratios over the years indicate changes in the company's operational efficiency and effectiveness in managing its resources.
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 | 368.85 | 355.56 | 307.94 | 37.27 | 30.97 |
| Days of sales outstanding (DSO) | days | 51.18 | 41.42 | 44.64 | 53.71 | 54.37 |
| Number of days of payables | days | 476.28 | 605.44 | 507.48 | 348.28 | 450.39 |
Days of Inventory on Hand (DOH) measures how efficiently a company manages its inventory. In 2023, DTE Energy Co. had 61.47 days of inventory on hand, indicating an increase from 34.01 days in 2021. The jump in DOH suggests that the company may be holding onto inventory for a longer period, which could tie up capital and potentially increase carrying costs.
Days of Sales Outstanding (DSO) reflects the average number of days it takes for a company to collect revenue after a sale is made. DTE Energy Co.'s DSO decreased from 54.37 days in 2019 to 51.18 days in 2023. This signifies an improvement in collecting receivables efficiency over the years, indicating better control over accounts receivable and potentially leading to improved cash flow.
Number of Days of Payables demonstrates how long it takes for a company to pay its suppliers. In 2023, DTE Energy Co. had 79.38 days of payables, a notable increase from 56.05 days in 2021. The increase in this ratio may suggest that the company is taking longer to pay its suppliers, which could indicate stretched liquidity or potentially strained supplier relationships.
Overall, the analysis of DTE Energy Co.'s activity ratios reveals a mixed picture in its management of inventory, receivables, and payables. The company should closely monitor these ratios to ensure efficient use of resources, timely collection of revenues, and sustainable relationships with suppliers.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.45 | 0.67 | 0.56 | 0.50 | 0.50 |
| Total asset turnover | 0.28 | 0.45 | 0.38 | 0.27 | 0.30 |
The long-term activity ratios of DTE Energy Co., as reflected by the fixed asset turnover and total asset turnover ratios, have experienced fluctuations over the past five years.
The fixed asset turnover ratio measures how efficiently the company is utilizing its fixed assets to generate revenue. DTE Energy's fixed asset turnover has ranged from 0.44 to 0.67 during the period under review, with 2022 showing the highest ratio. This indicates that in 2022, DTE Energy was able to generate more revenue relative to its investment in fixed assets compared to other years.
On the other hand, the total asset turnover ratio evaluates the company's ability to generate sales revenue in relation to its total assets. DTE Energy's total asset turnover has varied between 0.27 and 0.45, with 2022 also showing the highest ratio. This suggests that DTE Energy was more effective in utilizing its total assets to generate revenue in 2022 compared to other years.
Overall, the trend in both fixed asset turnover and total asset turnover ratios indicates some inconsistency in DTE Energy's efficiency in generating revenue from its assets over the five-year period. Investors and analysts may need to further investigate the underlying factors contributing to these fluctuations to assess the company's operational efficiency and asset utilization strategies.