Eversource Energy (ES)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 5.82 | 3.48 | 4.09 | 3.11 | 4.32 | 5.06 | 5.84 | 5.02 | 4.87 | 5.84 | 6.73 | 4.07 | 4.38 | 5.11 | 6.13 | 4.67 | 5.49 | 6.50 | 7.48 | 3.68 |
| Receivables turnover | 8.32 | 8.56 | 9.51 | 7.60 | 8.10 | 8.08 | 8.14 | 7.16 | 8.04 | 7.46 | 7.78 | 7.25 | 7.45 | 7.83 | 8.58 | 8.33 | 8.62 | 8.57 | 8.93 | 7.52 |
| Payables turnover | 1.58 | 0.94 | 1.07 | 0.72 | 0.76 | 1.12 | 1.13 | 0.96 | 0.78 | 0.98 | 1.19 | 1.18 | 0.85 | 0.90 | 1.13 | 1.46 | 1.13 | 1.49 | 1.44 | 1.01 |
| Working capital turnover | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
The activity ratios of Eversource Energy provide valuable insights into the efficiency of the company in managing its assets and liabilities. Here is a detailed analysis of the activity ratios based on the provided data:
1. Inventory Turnover:
- Eversource Energy's inventory turnover has been relatively stable over the quarters, ranging from 10.19 to 14.17. This indicates that the company efficiently manages its inventory levels, with a higher turnover showing that inventory is sold or used up more quickly.
- The average inventory turnover ratio of around 12.50 suggests that Eversource Energy is effectively utilizing its inventory to generate sales.
2. Receivables Turnover:
- The receivables turnover ratio has also shown consistency, ranging from 6.72 to 8.37. This implies that the company effectively collects payments from its customers within a reasonable timeframe.
- A higher turnover ratio signifies that Eversource Energy efficiently collects payments owed by customers, contributing to better cash flow management.
3. Payables Turnover:
- Eversource Energy's payables turnover has fluctuated but generally increased over the quarters, indicating that the company is taking longer to pay its suppliers.
- This could imply that the company is strategically managing its payables to improve cash flow or negotiate favorable payment terms with suppliers.
4. Working Capital Turnover:
- The absence of data for working capital turnover prevents a detailed analysis of how effectively Eversource Energy is utilizing its working capital to generate sales.
- It would be beneficial to monitor this ratio in the future to assess the efficiency of the company in utilizing its working capital to support its operations.
In conclusion, Eversource Energy's activity ratios reflect a strong operational efficiency in managing inventory levels, collecting receivables, and possibly optimizing payables. Monitoring these ratios can provide further insights into the company's operational performance and financial health.
Average number of days
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 62.70 | 104.86 | 89.30 | 117.24 | 84.54 | 72.20 | 62.47 | 72.69 | 75.02 | 62.55 | 54.27 | 89.57 | 83.29 | 71.43 | 59.50 | 78.19 | 66.50 | 56.13 | 48.82 | 99.27 |
| Days of sales outstanding (DSO) | days | 43.87 | 42.63 | 38.38 | 48.04 | 45.06 | 45.19 | 44.83 | 51.01 | 45.37 | 48.92 | 46.90 | 50.33 | 49.02 | 46.60 | 42.52 | 43.83 | 42.35 | 42.60 | 40.90 | 48.53 |
| Number of days of payables | days | 231.01 | 386.28 | 341.09 | 504.58 | 477.32 | 327.06 | 322.22 | 378.44 | 468.99 | 371.13 | 306.79 | 308.43 | 429.85 | 407.34 | 321.66 | 249.52 | 324.13 | 245.44 | 253.28 | 360.65 |
To analyze Eversource Energy's activity ratios, we will assess its Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.
1. Days of Inventory on Hand (DOH):
- Eversource Energy's DOH shows the number of days the company holds inventory before selling it. The trend indicates a moderate increase from Q1 2023 to Q4 2023, which suggests that the company may be carrying more inventory. This could be due to seasonal factors or changes in demand.
2. Days of Sales Outstanding (DSO):
- DSO reflects how long the company takes to collect revenue after making a sale. DSO decreased from Q1 2022 to Q2 2023, indicating an improvement in collecting revenue more efficiently. However, there was a slight increase in Q4 2023, signifying that the company may be facing challenges in collecting payments promptly.
3. Number of Days of Payables:
- This ratio represents the number of days the company takes to pay its suppliers. A decrease in this ratio suggests that the company is taking longer to pay its bills. Eversource Energy's number of days of payables fluctuated over the quarters, indicating that the company's payment terms to suppliers varied.
Overall, Eversource Energy's activity ratios show fluctuations over the quarters, which could be influenced by factors such as changing demand patterns, operational efficiency, or changes in payment terms with suppliers. Further analysis and comparison with industry benchmarks would provide more insights into the company's performance in managing its working capital and operations efficiently.
Long-term
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | — | 3.74 | 0.34 | 0.34 | 0.34 | 0.34 | 0.32 | 0.31 | 0.30 | 0.30 | 0.30 | 0.30 | 0.29 | 0.30 | 0.30 | 0.30 | 0.31 | 0.32 | 0.33 | 0.33 |
| Total asset turnover | 0.21 | 0.22 | 0.23 | 0.23 | 0.23 | 0.23 | 0.22 | 0.21 | 0.20 | 0.20 | 0.20 | 0.20 | 0.19 | 0.20 | 0.20 | 0.20 | 0.21 | 0.21 | 0.22 | 0.22 |
Eversource Energy's long-term activity ratios, specifically the fixed asset turnover and total asset turnover, provide insights into the company's efficiency in generating revenue from its assets over the long term.
Fixed asset turnover, which measures how efficiently the company utilizes its fixed assets to generate sales, decreased slightly over the quarters from Q1 2022 to Q4 2023, fluctuating between 0.30 and 0.34. This indicates that the company may not have significantly improved its ability to generate revenue from its fixed assets over this period. A fixed asset turnover ratio of less than 1 suggests that Eversource Energy may not be efficiently utilizing its fixed assets to maximize revenue.
Total asset turnover, which measures how efficiently the company utilizes all its assets to generate revenue, also showed a similar trend as the fixed asset turnover, hovering around 0.21 to 0.23 from Q1 2022 to Q4 2023. The total asset turnover ratio indicates the efficiency of the company in generating sales relative to its total assets. A ratio below 1 suggests that Eversource Energy may not be efficiently utilizing its total assets to generate revenue, which could potentially be a concern for investors and stakeholders.
Overall, the long-term activity ratios for Eversource Energy suggest that the company may need to focus on improving the efficiency of its asset utilization to enhance its revenue generation capabilities and potentially boost its financial performance in the future.