Hess Corporation (HES)

Short-term

Turnover ratios

In analyzing the activity ratios of Hess Corporation, we observed fluctuations in its key ratios over the period under review.

1. Inventory turnover: The company's inventory turnover ratio varied between 8.50 to 17.44 over the period, with the highest turnover seen in June 30, 2024. This indicates that Hess Corporation efficiently managed its inventory levels, with a higher turnover generally being favorable.

2. Receivables turnover: The receivables turnover data was not available, indicating a lack of information on how quickly the company collects on its credit sales. Ideally, a higher turnover in receivables implies better credit management.

3. Payables turnover: Similar to receivables turnover, information on payables turnover was not provided. This ratio reflects how quickly a company pays its suppliers, with a higher turnover generally considered positive.

4. Working capital turnover: The working capital turnover ranged from 2.70 to 65.69, with a significant peak in December 31, 2023. A higher turnover in working capital suggests efficient utilization of resources to generate revenue, indicating improved operational efficiency.

Overall, the analysis of activity ratios suggests that Hess Corporation effectively managed its inventory and working capital levels during the period, but further insight into receivables and payables turnover is needed for a comprehensive assessment of the company's liquidity and operational efficiency.

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Average number of days

Based on the provided data for Hess Corporation, we can analyze the activity ratios as follows:

1. Days of Inventory on Hand (DOH):
- The days of inventory on hand ratio measures how many days it takes for the company to sell its inventory. A lower DOH indicates faster turnover of inventory, which is generally preferred as it implies efficient inventory management.
- The DOH for Hess Corporation fluctuated over the analyzed periods, ranging from 11.33 days to 42.93 days. This indicates varying levels of inventory management efficiency during these periods.

2. Days of Sales Outstanding (DSO):
- Unfortunately, there is no data provided for the Days of Sales Outstanding (DSO) ratio, which typically measures how long it takes for the company to collect its accounts receivable. Without this information, we cannot assess the efficiency of the company in collecting its receivables.

3. Number of Days of Payables:
- Similarly, no data is provided for the Number of Days of Payables ratio, which measures how long the company takes to pay its suppliers. This ratio is important for analyzing the company's liquidity management and payment practices.

Overall, while the information for the Days of Inventory on Hand ratio gives some insight into the efficiency of inventory management at Hess Corporation, the lack of data for the Days of Sales Outstanding and Number of Days of Payables ratios limits our ability to provide a comprehensive analysis of the company's overall activity and working capital management.

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See also:

Hess Corporation Short-term (Operating) Activity Ratios (Quarterly Data)

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Long-term

Hess Corporation's long-term activity ratios indicate how efficiently the company is utilizing its assets to generate sales revenue.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how effectively the company is using its fixed assets (property, plant, and equipment) to generate sales.
- From March 31, 2020, to December 31, 2023, the fixed asset turnover ratio steadily increased from 0.42 to 0.74, indicating improved efficiency in utilizing fixed assets to generate sales.
- However, from March 31, 2024, the data is not available which may need further investigation or the ratio might be inconsistent.

2. Total Asset Turnover:
- The total asset turnover ratio evaluates how efficiently the company uses all its assets to generate revenue.
- The total asset turnover ratio also showed an increasing trend from March 31, 2020, to December 31, 2024, from 0.30 to 0.48, suggesting a positive utilization of overall assets to generate sales revenue.
- The company's ability to generate more sales revenue relative to its total assets has been improving over the years, implying effective asset management and optimization of resources.

In conclusion, based on the analysis of Hess Corporation's long-term activity ratios, the company has shown improvement in both fixed asset turnover and total asset turnover, indicating increasing efficiency in asset utilization and revenue generation. The increasing trend in these ratios reflects positively on the company's operational effectiveness and management of its asset base.

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See also:

Hess Corporation Long-term (Investment) Activity Ratios (Quarterly Data)