Eversource Energy (ES)

Short-term

Turnover ratios

The activity ratios for Eversource Energy provide insights into how efficiently the company is managing its inventory and working capital:

1. Inventory Turnover:
- Eversource Energy's inventory turnover improved from 16.82 in 2020 to 19.11 in 2021, indicating that the company is selling its inventory more quickly.
- The ratio remained relatively stable at around 18.37 in 2022 and 2023 but decreased to 13.92 in 2024.
- A higher inventory turnover ratio generally signifies efficient management of inventory levels and effective sales strategies.

2. Receivables Turnover:
- The data shows "—", indicating that information on receivables turnover is not provided. Therefore, it is not possible to assess how quickly Eversource Energy is collecting its accounts receivable.

3. Payables Turnover:
- Similar to receivables turnover, the payables turnover ratio is not available ("—"), making it difficult to evaluate the company's efficiency in paying its suppliers.

4. Working Capital Turnover:
- The absence of data on working capital turnover ("—") suggests that we lack information on how effectively Eversource Energy is utilizing its working capital to generate sales revenue.

In summary, while Eversource Energy has shown improvement in inventory turnover over the years, the lack of information on receivables, payables, and working capital turnover ratios limits a comprehensive analysis of the company's overall operational efficiency.

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Average number of days

Eversource Energy's activity ratios provide insights into how efficiently the company manages its inventory, sales, and payables.

1. Days of Inventory on Hand (DOH):
- Eversource Energy's DOH decreased from 21.70 days in 2020 to 19.10 days in 2021, indicating a more efficient management of inventory levels.
- However, the DOH slightly increased to 19.86 days in 2022 and further to 26.21 days in 2023, suggesting a potential buildup of inventory.
- In 2024, the DOH increased slightly to 26.47 days, which may indicate slower inventory turnover.

2. Days of Sales Outstanding (DSO):
- Data for DSO is not provided, which makes it difficult to assess how quickly Eversource Energy collects its accounts receivable from customers.

3. Number of Days of Payables:
- Similarly, no data is available for the number of days of payables, which would have shown how long Eversource Energy takes to pay its suppliers.

Overall, based on the available information, Eversource Energy appears to have effectively managed its inventory levels, but more data on DSO and payables would provide a more complete picture of the company's efficiency in managing its working capital.

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Long-term

The fixed asset turnover ratio reflects how efficiently a company utilizes its fixed assets to generate revenue. Eversource Energy's fixed asset turnover has been gradually increasing from 0.29 in 2020 to 0.30 in 2021 and further to 0.34 in 2022. This indicates that the company is generating more revenue per dollar of fixed assets invested, which is a positive trend for investors.

On the other hand, the total asset turnover ratio measures how well a company utilizes all its assets to generate revenue. Eversource Energy's total asset turnover was 0.19 in 2020 and improved to 0.20 in 2021, then to 0.23 in 2022, before dropping slightly to 0.21 in 2023 and returning to 0.20 in 2024. Overall, the company has been effectively utilizing its total assets to generate revenue over the years, although there was a slight dip in 2023.

In conclusion, Eversource Energy's long-term activity ratios indicate a positive trend in efficiently utilizing both fixed assets and total assets to generate revenue, which is a favorable sign for its financial performance and operational management.