Evergy Inc. Common Stock (EVRG)

Short-term

Turnover ratios

1. Inventory Turnover: Evergy Inc's inventory turnover ratio has been declining over the past years. In 2023, the ratio stands at 1.93, showing a decrease from 2.71 in 2022. This indicates that the company is selling through its inventory at a slower pace compared to previous years.

2. Receivables Turnover: The receivables turnover ratio for Evergy Inc has generally been increasing, indicating an improvement in collecting receivables efficiently. In 2023, the ratio is 20.52, up from 18.05 in 2022. This suggests that the company is collecting its outstanding receivables more frequently.

3. Payables Turnover: Evergy Inc's payables turnover ratio has fluctuated over the years but has shown a decreasing trend recently. In 2023, the ratio is 2.42, down from 3.03 in 2022. A lower payables turnover ratio could imply that the company is taking longer to pay its suppliers.

4. Working Capital Turnover: The data provided does not include the working capital turnover ratio for Evergy Inc. This ratio is calculated by dividing revenue by average working capital and indicates the efficiency of a company in generating revenue relative to its working capital. Without this information, it is challenging to assess the company's efficiency in utilizing its working capital to generate sales.

Overall, analyzing these activity ratios provides insights into Evergy Inc's efficiency in managing its inventory, collecting receivables, and paying payables. These ratios are important for assessing the operational performance and financial health of the company.

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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 the activity ratios of Evergy Inc:

1. Days of Inventory on Hand (DOH):
- Evergy's DOH has fluctuated over the years, ranging from 132.85 days in 2021 to 189.53 days in 2023.
- Generally, a lower DOH indicates better inventory management efficiency as it signifies a quicker turnover of inventory.
- The increasing trend in DOH from 2021 to 2023 may suggest that Evergy is holding excess inventory or facing challenges in selling its products promptly.

2. Days of Sales Outstanding (DSO):
- Evergy's DSO has varied over the years, with the lowest value of 16.31 days in 2021 and the highest of 25.02 days in 2020.
- A lower DSO is favorable as it indicates that the company is collecting its accounts receivable faster.
- The decreasing trend in DSO from 2020 to 2021 and the subsequent increase in 2023 may imply changes in Evergy's credit policies or the creditworthiness of its customers.

3. Number of Days of Payables:
- Evergy's payables period has also shown fluctuations, with the highest figure of 217.21 days in 2020 and the lowest of 120.41 days in 2022.
- A longer payables period may indicate that the company is taking longer to pay its suppliers, potentially to manage cash flow.
- The significant variation in payables days over the years may be influenced by Evergy's working capital management strategies or negotiation terms with suppliers.

Overall, analyzing these activity ratios provides valuable insights into Evergy Inc's operational efficiency in managing inventory, collecting receivables, and paying suppliers. The company may need to further investigate the factors influencing these ratios to enhance its working capital management and overall financial performance.

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Long-term

In analyzing Evergy Inc's long-term activity ratios, we focus on the fixed asset turnover and total asset turnover ratios over the past five years.

The fixed asset turnover ratio measures how efficiently the company generates sales from its investment in fixed assets. Evergy Inc's fixed asset turnover has decreased slightly from 0.27 in 2019 to 0.23 in 2023. This downward trend suggests that the company may be less effective in utilizing its fixed assets to generate revenue over the years.

On the other hand, the total asset turnover ratio indicates how well the company is utilizing all its assets to generate sales. Evergy Inc's total asset turnover ratio has fluctuated within a narrow range between 0.18 and 0.20 over the five-year period. This stability implies that the company has maintained a consistent level of efficiency in generating sales relative to its total assets.

Overall, the declining trend in fixed asset turnover and the stability in total asset turnover ratios for Evergy Inc indicate potential challenges in effectively utilizing its fixed assets for revenue generation. Further analysis of the company's investment strategies and operational efficiency may be warranted to address these trends and improve long-term performance.