Heritage Financial Corporation (HFWA)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | — | — | — | — |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | — | 4.54 | 0.16 | 0.28 | 1.07 |
Inventory turnover is not provided in the table, which makes it difficult to assess Heritage Financial Corp.'s efficiency in managing its inventory.
Receivables turnover has been improving over the years, indicating that the company is collecting its accounts receivable more frequently. This implies that Heritage Financial Corp. is efficiently managing its credit sales and collecting payments from customers in a timely manner.
Payables turnover is not available in the data provided, making it impossible to evaluate how quickly the company is paying its suppliers.
Working capital turnover has fluctuated over the years but has generally remained stable around the range of 0.62 to 0.75. This ratio measures how efficiently the company is using its working capital to generate sales. A higher turnover ratio indicates better utilization of working capital to generate revenue.
Overall, while the company's receivables turnover has shown improvement over the years, the absence of data for inventory turnover and payables turnover limits the comprehensive assessment of Heritage Financial Corp.'s activity ratios. It would be beneficial to include these additional ratios for a more thorough analysis of the company's operational efficiency.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
The activity ratios for Heritage Financial Corp. provide insights into the efficiency of the company's operations.
1. Days of Sales Outstanding (DSO):
- DSO measures the average number of days it takes for a company to collect payment on its sales invoices.
- The trend for Heritage Financial Corp.'s DSO shows fluctuation over the years.
- In 2023, the DSO improved to 23.50 days compared to 26.34 days in 2022, indicating that the company is collecting receivables more efficiently.
- A lower DSO is generally favorable as it signifies faster cash conversion from sales.
2. Days of Inventory on Hand (DOH):
- Unfortunately, the table does not include data for Days of Inventory on Hand for Heritage Financial Corp., which could have provided insights into the efficiency of managing inventory.
- DOH measures how many days it takes for a company to sell its inventory.
- A lower DOH indicates that the company is selling its inventory quickly and efficiently.
3. Number of Days of Payables:
- The table also does not provide data for the Number of Days of Payables for Heritage Financial Corp., which could have shed light on the company's ability to manage its payables effectively.
- A higher number of days of payables indicates that the company takes longer to pay its suppliers, which can be beneficial for managing cash flow.
In conclusion, while the DSO indicates an improvement in the collection of receivables for Heritage Financial Corp. in 2023, the missing data for DOH and the Number of Days of Payables limits a comprehensive analysis of the company's overall activity ratios.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.20 | 3.37 | 3.42 | 2.37 | 2.61 |
| Total asset turnover | 0.03 | 0.04 | 0.04 | 0.03 | 0.04 |
The long-term activity ratios, fixed asset turnover, and total asset turnover for Heritage Financial Corp. have shown favorable trends over the past five years.
Fixed asset turnover has been steadily increasing from 2.85 in 2019 to 4.05 in 2023. This indicates that the company is generating more revenue per dollar invested in fixed assets, reflecting increased efficiency in utilizing its long-term assets for revenue generation.
On the other hand, total asset turnover has remained relatively stable, hovering around 0.04 over the five-year period. While it did dip slightly in 2021, the ratio rebounded in subsequent years. This suggests that the company is effectively utilizing its total assets to generate revenue, maintaining a consistent level of efficiency in generating sales relative to the size of its asset base.
Overall, the increasing trend in fixed asset turnover coupled with the stable total asset turnover indicates that Heritage Financial Corp. has been improving its efficiency in utilizing both fixed and total assets to drive revenue growth over the years. This signifies a positive performance in managing its long-term assets to support its business operations.