FirstEnergy Corporation (FE)

Short-term

Turnover ratios

Firstenergy Corp.'s activity ratios provide insights into how efficiently the company manages its assets and liabilities to generate revenue.

1. Inventory turnover: The inventory turnover ratio measures how many times a company sells and replaces its inventory during a specific period. Firstenergy Corp. showed a declining trend in inventory turnover from Q4 2022 to Q4 2023, indicating that the company has been selling its inventory at a slightly slower pace over time. However, the ratios are relatively stable, ranging from 9.07 to 13.27, suggesting that the company efficiently manages its inventory levels.

2. Receivables turnover: This ratio reflects how effectively a company collects cash from its customers. The receivables turnover for Firstenergy Corp. fluctuated but generally maintained a stable range between 7.93 and 8.82 over the observed periods. This implies that the company has been consistent in collecting payments from its customers at a healthy pace.

3. Payables turnover: The payables turnover ratio evaluates how efficiently a company pays its suppliers and trade creditors. Firstenergy Corp. demonstrated an increasing trend in payables turnover from Q4 2022 to Q4 2023, indicating that the company is taking a shorter time to pay its suppliers. The ratios ranged from 3.06 to 4.06, suggesting that the company effectively manages its payables.

4. Working capital turnover: Unfortunately, the data provided does not include information on the working capital turnover ratio for Firstenergy Corp. This ratio would have provided insights into how efficiently the company utilizes its working capital to generate revenue.

Overall, based on the analysis of the activity ratios, it appears that Firstenergy Corp. efficiently manages its inventory, accounts receivable, and accounts payable, which are positive indicators of its operational effectiveness and liquidity management.

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Average number of days

Firstenergy Corp.'s activity ratios provide insights into the efficiency of the company's operations and management of its working capital.

1. Days of Inventory on Hand (DOH):
- Firstenergy Corp. showed an increasing trend in its DOH from Q1 2023 to Q4 2023, indicating that the company is holding inventory for a longer period.
- The DOH increased from 27.50 days in Q1 2022 to 40.22 days in Q4 2023, suggesting a potential issue with inventory management efficiency.

2. Days of Sales Outstanding (DSO):
- The DSO measures how long it takes for the company to collect its accounts receivable. Firstenergy Corp.'s DSO ranged from 41.37 days in Q2 2023 to 46.02 days in Q4 2022.
- The company's DSO remained relatively stable over the periods, indicating consistent collections practices.

3. Number of Days of Payables:
- Firstenergy Corp.'s days of payables ranged from 89.81 days in Q2 2023 to 119.44 days in Q4 2022.
- The increasing trend in days of payables suggests that the company is taking longer to pay its trade payables, which may positively impact cash flow management.

Overall, while the company has shown some inconsistency in managing its inventory efficiently, it has maintained relatively stable collection practices and has been able to extend its payables over time. Management should focus on optimizing inventory levels to improve working capital efficiency.

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Long-term

Firstenergy Corp.'s long-term activity ratios reflect how efficiently the company utilizes its assets to generate revenue.

1. Fixed asset turnover: The fixed asset turnover ratio remained relatively stable at around 0.34 to 0.35 throughout the past eight quarters. This indicates that for every dollar invested in fixed assets, the company is generating $0.34 to $0.35 in revenue. The consistent ratio suggests that Firstenergy Corp. has been effectively utilizing its fixed assets to generate sales.

2. Total asset turnover: The total asset turnover ratio also remained steady at approximately 0.26 to 0.27 over the same period. This ratio indicates that for every dollar of total assets, the company is generating $0.26 to $0.27 in revenue. The stable total asset turnover ratio suggests that Firstenergy Corp. has been maintaining a consistent level of efficiency in generating sales relative to its total asset base.

Overall, the long-term activity ratios of Firstenergy Corp., as indicated by the fixed asset turnover and total asset turnover ratios, have been relatively stable over the past eight quarters. This stability suggests that the company has been effectively managing and utilizing its assets to generate revenue consistently.