Duke Energy Corporation (DUK)

Short-term

Turnover ratios

The analysis of Duke Energy Corp.'s activity ratios reveals the following trends:

1. Inventory Turnover: The inventory turnover ratio indicates how efficiently Duke Energy manages its inventory levels. The ratio has fluctuated over the past five years, with a peak in 2022 at 2.81 and a low in 2021 at 2.18. In 2023, the ratio decreased to 2.26, suggesting a slight decline in inventory turnover efficiency compared to the previous year.

2. Receivables Turnover: The receivables turnover ratio demonstrates how quickly Duke Energy collects its accounts receivable. The ratio has been relatively stable over the years, ranging from 6.52 to 8.20. In 2023, the ratio increased to 7.03, indicating an improvement in the collection of receivables compared to the previous year.

3. Payables Turnover: The payables turnover ratio reflects how rapidly Duke Energy pays its suppliers. The ratio has shown fluctuations over the years, with a low in 2021 at 1.92 and a high in 2023 at 2.29. The increase in the payables turnover ratio in 2023 suggests that Duke Energy is managing its payables more efficiently compared to the previous year.

4. Working Capital Turnover: The working capital turnover ratio measures how effectively Duke Energy utilizes its working capital to generate sales. Unfortunately, data for this ratio is missing for all years, making it difficult to assess the company's efficiency in utilizing its working capital.

In summary, the analysis of Duke Energy Corp.'s activity ratios highlights fluctuations in inventory turnover, stable receivables turnover, improved payables turnover, and a lack of data for working capital turnover. These ratios provide insights into the company's operational efficiency and effectiveness in managing its working capital and relationships with suppliers and customers.

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Average number of days

Activity ratios provide insights into how efficiently a company manages its assets and liabilities. Let's analyze Duke Energy Corp.'s activity ratios based on the data provided.

1. Days of Inventory on Hand (DOH):
- For Duke Energy Corp., the days of inventory on hand have shown fluctuating trends over the years, with a peak of 177.54 days in 2020 and a low of 130.06 days in 2022. The current ratio stands at 161.85 days, indicating that the company holds inventory for approximately 161.85 days before selling it.
- A decreasing trend in DOH could suggest improved inventory management efficiency by reducing excess inventory levels or faster inventory turnover, whereas an increasing trend may indicate issues with demand forecasting or inefficient inventory control.

2. Days of Sales Outstanding (DSO):
- Duke Energy Corp.'s days of sales outstanding have varied over the years, with a range from 44.54 days in 2019 to 56.02 days in 2022. As of 2023, the DSO stands at 51.89 days, indicating the average number of days it takes for the company to collect its accounts receivable.
- A lower DSO implies faster collections from customers, which is favorable as it signifies efficient credit management and liquidity. Conversely, a high DSO may suggest potential challenges in collecting receivables promptly.

3. Number of Days of Payables:
- The days of payables for Duke Energy Corp. have shown some volatility, ranging from 159.44 days in 2023 to 190.31 days in 2021. Currently, the company takes approximately 159.44 days to pay its suppliers.
- A shorter payables period could indicate that the company is managing its payments effectively, although excessively short payables periods may hint at strained supplier relationships. Conversely, a longer payables period may provide liquidity benefits but could also signify potential cash flow issues or unfavorable payment terms.

In conclusion, analyzing these activity ratios for Duke Energy Corp. can help assess its operational efficiency, inventory management practices, working capital management, and overall effectiveness in converting assets into revenue. Monitoring these ratios over time can provide valuable insights into the company's performance and financial health.

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Long-term

The analysis of Duke Energy Corp.'s long-term activity ratios reveals notable trends over the past five years. The fixed asset turnover ratio has been relatively stable, ranging between 0.22 and 0.26, with a slight decline in 2021 compared to the previous years. This ratio indicates that for each dollar of fixed assets, the company generates between $0.22 to $0.26 in sales revenue.

On the other hand, the total asset turnover ratio has also remained consistent around 0.15 to 0.16 over the same period. This ratio reflects how efficiently the company utilizes all its assets to generate revenue. Despite fluctuations, Duke Energy Corp. has maintained a relatively steady performance in converting its total assets into sales.

Overall, the long-term activity ratios suggest that Duke Energy Corp. has been able to effectively manage its assets to generate revenue consistently over the past five years. The company's efficiency in utilizing both fixed and total assets to drive sales indicates a stable operational performance in the long term.