H2O America (HTO)

Short-term

Turnover ratios

The activity ratios of H2O America over the specified period reveal several insights into the company's operational efficiency.

Regarding inventory turnover, no data is available for any of the years from 2020 through 2024, indicating either a lack of inventory or an absence of inventory management information during this period.

The receivables turnover ratio remains relatively stable, with slight fluctuations. It was 5.48 in both 2020 and 2021, increased marginally to 5.62 in 2022, then declined to 5.31 in 2023, and further decreased slightly to 5.25 in 2024. This suggests that the company's efficiency in collecting receivables has experienced minor declines in the later years, indicating a slight elongation in the receivables collection period.

The payables turnover ratio shows an increasing trend from 7.25 in 2020 to 8.91 in 2022, implying increased efficiency in paying suppliers or possibly earlier payment cycles. However, in 2023, it decreased significantly to 6.11, and further declined to 5.75 in 2024. This pattern suggests a recent slowdown in the company's ability or willingness to pay its payables promptly, which could impact supplier relationships or reflect changes in payment policies.

Overall, the activity ratios depict a period of relative stability in receivables management with some deterioration in late years, and a fluctuating pattern in payables management, with recent years showing decreased turnover rates. The absence of inventory turnover data limits a comprehensive analysis of inventory management efficiency.

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Average number of days

The activity ratios for H2O America, specifically regarding days of inventory on hand (DOH), days of sales outstanding (DSO), and days of payables, reveal several insights into the company's operational efficiency over the period from 2020 to 2024.

Days of Inventory on Hand (DOH):
The data indicates that the company did not report specific figures for DOH for any of the years from 2020 through 2024. This absence suggests that inventory management metrics were either not calculated, not disclosed, or held constant without variation, limiting analysis in this area.

Days of Sales Outstanding (DSO):
H2O America maintained a relatively stable DSO around 66.66 days in 2020 and 2021, reflecting consistency in collection periods during these years. In 2022, there was a slight decrease to approximately 64.95 days, indicating marginally improved receivables collection efficiency. However, in 2023 and 2024, DSO increased to approximately 68.76 days and 69.51 days, respectively, showing a gradual lengthening in the time taken to collect receivables. This trend may suggest a slowdown in collection efficiency or a strategic leniency in credit terms.

Number of Days of Payables:
The company's days payable increased notably from 50.34 days in 2020 to 43.48 days in 2021 and further decreased slightly to 40.97 days in 2022. These figures imply that the company was paying its suppliers relatively promptly during these years. However, in 2023 and 2024, the days payable lengthened significantly to approximately 59.71 days and 63.51 days, respectively. This extension indicates that H2O America delayed payments to suppliers, which could be a strategic move to preserve cash flows or reflect changing supplier terms or financial pressures.

Overall Trend Analysis:
From 2020 to 2024, the company's receivables collection period (DSO) shows a minimal fluctuation with a slight increasing trend after 2022, potentially pointing to a marginal decline in collection efficiency or shifts in credit policies. The substantial increase in days payable during 2023 and 2024 suggests a deliberate effort to extend payment periods, possibly to improve liquidity positioning or to manage working capital more conservatively.

Since inventory data was not available, a comprehensive analysis of inventory management efficiency cannot be performed. Nonetheless, the available activity ratios highlight a pattern of cautious receivables collection and extended payables periods in recent years, which collectively impact the company's cash conversion cycle and liquidity management strategies.

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Long-term

The analysis of H2O America's long-term activity ratios reveals the following insights.

Regarding fixed asset turnover, the data presents a consistent absence of values across all reporting periods from December 31, 2020, through December 31, 2024. This indicates that the company either did not report or did not have significant fixed assets during these years, suggesting limited reliance or investment in long-term tangible assets relative to total sales.

In contrast, the total asset turnover ratio shows a relatively stable pattern over the five-year span. The ratio fluctuated slightly, beginning at 0.17 in 2020, decreasing marginally to 0.16 in 2021, then returning to 0.17 in 2022. A further slight decrease to 0.15 is observed in 2023, followed by a minor increase back to 0.16 in 2024. These minor variations imply that H2O America maintained a steady overall efficiency in using its total assets to generate sales during this period.

Overall, the long-term activity ratios suggest that while fixed asset utilization data are unavailable or not emphasized, the firm’s asset efficiency, as captured by the total asset turnover ratio, remained relatively stable but modest, indicating a consistent approach in asset management relative to sales generation over the analyzed period.