MGE Energy Inc (MGEE)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Inventory turnover	0.38	0.35	0.33	0.33	0.32	0.29	0.29	0.29	0.26	0.24	0.31	0.45	0.38	0.40	0.44	0.51	0.39	0.37	0.41	0.47
Receivables turnover	6.97	7.86	7.60	7.57	7.23	8.34	8.67	7.53	6.50	8.45	8.51	6.73	6.25	7.35	7.93	7.13	7.07	7.87	8.45	7.79
Payables turnover	0.33	0.53	0.46	0.55	0.35	0.40	0.54	0.52	0.33	0.30	0.21	0.43	0.30	0.35	0.43	0.37	0.34	0.33	0.46	0.49
Working capital turnover	6.66	11.04	12.23	8.09	8.52	7.65	11.38	9.36	38.79	135.88	19.72	6.72	7.44	5.26	12.48	31.43	28.97	6.43	5.05	10.77

MGE Energy Inc's Inventory Turnover ratio has shown a fluctuating trend over the past few years, with a decrease from 0.47 on March 31, 2020, to 0.26 on December 31, 2022, before increasing slightly to 0.38 on December 31, 2024. This indicates that the company is taking longer to sell its inventory in recent years.

The Receivables Turnover ratio reflects how efficiently MGE Energy Inc collects payments from its customers. The ratio has been relatively stable, varying between 6.25 and 8.67 over the analyzed period. This consistency suggests that the company has been effectively managing its accounts receivable process.

In terms of Payables Turnover, MGE Energy Inc's ability to manage its outstanding payments to suppliers has been inconsistent. The ratio ranged from 0.21 to 0.55 during the period under review, indicating fluctuations in the company's payment practices and relationships with suppliers.

The Working Capital Turnover ratio measures how efficiently the company is utilizing its working capital to generate sales. MGE Energy Inc's ratio has shown significant variability, ranging from 5.05 to 135.88, with peaks and troughs across the years. This suggests that the company's efficiency in utilizing its working capital has varied considerably over the analyzed period.

Overall, while MGE Energy Inc has demonstrated consistency in its receivables turnover, the company's inventory turnover, payables turnover, and working capital turnover ratios have exhibited fluctuations, indicating areas where operational efficiency can be improved and potentially optimized for better financial performance.

Average number of days

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	958.14	1,050.29	1,119.34	1,104.62	1,156.76	1,238.49	1,271.05	1,252.02	1,387.29	1,525.90	1,170.78	813.34	970.84	905.81	833.94	714.58	934.55	980.24	898.12	773.05
Days of sales outstanding (DSO)	days	52.40	46.45	48.02	48.23	50.50	43.75	42.10	48.44	56.15	43.21	42.88	54.25	58.43	49.68	46.04	51.16	51.63	46.40	43.22	46.83
Number of days of payables	days	1,097.25	691.63	790.05	659.42	1,042.17	916.57	682.03	698.19	1,108.22	1,218.90	1,712.39	848.03	1,198.59	1,029.58	844.15	994.51	1,080.41	1,111.76	793.24	743.90

Based on the provided data for MGE Energy Inc, the activity ratios can give insight into how efficiently the company manages its inventory, sales, and payables.

1. Days of Inventory on Hand (DOH):
- The DOH ratio measures how many days, on average, inventory is held before being sold.
- MGE Energy Inc's DOH increased from March 31, 2020, to a peak of 1,525.90 days on September 30, 2022, suggesting a significant buildup of inventory.
- Although there was a slight decrease in DOH after September 2022, it remained high, indicating potential inefficiencies in inventory management.

2. Days of Sales Outstanding (DSO):
- The DSO ratio indicates the average number of days it takes for the company to collect payment after making a sale.
- MGE Energy Inc's DSO fluctuated over the period, with a peak of 58.43 days on December 31, 2021.
- The company managed to reduce its DSO from December 2021 onwards, which could imply more efficient credit and collection processes.

3. Number of Days of Payables:
- This ratio reveals how long, on average, the company takes to pay its suppliers for goods and services.
- MGE Energy Inc's number of days of payables varied widely, reaching a high of 1,712.39 days on June 30, 2022.
- The company seemed to have erratic payment patterns, with some periods showing extended payment cycles that may impact supplier relationships.

In conclusion, MGE Energy Inc should focus on optimizing its inventory levels to reduce excess stock, continue improving its collection processes to shorten DSO, and establish a more consistent approach to managing payables to maintain healthy supplier relationships.

Long-term

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Fixed asset turnover	0.30	0.30	0.30	0.31	0.32	0.35	0.35	0.36	0.36	0.35	0.35	0.34	0.32	0.31	0.31	0.31	0.30	0.31	0.32	0.33
Total asset turnover	0.24	0.24	0.24	0.25	0.26	0.28	0.28	0.29	0.28	0.28	0.27	0.27	0.26	0.25	0.25	0.25	0.24	0.25	0.25	0.27

MGE Energy Inc's fixed asset turnover has been relatively stable over the past five years, ranging from 0.30 to 0.36. This indicates that the company is generating between 0.30 to 0.36 in revenue for every dollar of fixed assets invested. The slight increase in fixed asset turnover from 0.30 in December 2021 to 0.36 in March 2024 suggests that the efficiency of utilizing fixed assets to generate sales has improved over this period.

On the other hand, MGE Energy Inc's total asset turnover has fluctuated more significantly, ranging from 0.24 to 0.29 over the same period. This ratio measures the company's ability to generate sales from all its assets. The fluctuations in total asset turnover may indicate varying efficiency in asset utilization or changes in business operations impacting revenue generation.

Overall, while the fixed asset turnover has shown a more stable trend, the total asset turnover has exhibited more variability, potentially highlighting different aspects of the company's operational efficiency and performance. Continued monitoring and analysis of these ratios can provide insights into MGE Energy Inc's long-term activity and asset management strategies.