Middlesex Water Company (MSEX)

Short-term

Turnover ratios

Inventory turnover for Middlesex Water Co. has remained consistently at 0.00 over the past five years, indicating that the company is not holding significant levels of inventory. This could be due to the nature of its business, as water utilities typically do not have large inventories.

On the other hand, the receivables turnover ratio has shown a slight decline from 7.05 in 2019 to 6.05 in 2023. This implies that the company is collecting its receivables less frequently compared to previous years, which may be a cause for concern as it indicates a potential slowdown in cash flow.

The payables turnover ratio remains at 0.00 across all years, suggesting that the company may not have significant payables or that payment terms with suppliers are such that payables turnover is not a relevant metric.

The working capital turnover of 35.32 in 2023 indicates that the company generates significant revenue relative to its working capital. However, the lack of data for previous years limits our ability to assess trends in this ratio.

Overall, the activity ratios suggest that Middlesex Water Co. may need to closely monitor its receivables turnover to ensure efficient collection of outstanding payments and maintain healthy cash flow.

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Average number of days

Days of sales outstanding (DSO) for Middlesex Water Co. have shown a slight increase over the five-year period, from 51.77 days in 2019 to 60.30 days in 2023. This indicates that, on average, it takes the company longer to collect its accounts receivable. A higher DSO could suggest potential issues with credit policies or difficulties in collecting payments from customers efficiently.

Without information on Days of Inventory on Hand and Number of Days of Payables, it is challenging to provide a complete analysis of the cash conversion cycle or working capital management for Middlesex Water Co. However, focusing solely on DSO, a steady increase in this ratio over time should prompt management to review and possibly revise their credit and collection policies to improve cash flow and liquidity.

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Long-term

The long-term activity ratios of Middlesex Water Co. provide insights into the efficiency of the company's use of its fixed assets and total assets to generate revenue over the years.

The fixed asset turnover ratio for the company has been relatively stable between 0.16 and 0.19 over the past five years. This indicates that, on average, the company is generating $0.16 to $0.19 in revenue for every dollar invested in fixed assets. A lower fixed asset turnover ratio may suggest underutilization of fixed assets, while a higher ratio may indicate better efficiency in asset utilization.

Similarly, the total asset turnover ratio has ranged from 0.13 to 0.15 during the same period. This ratio reflects the company's ability to generate sales from all its assets. A lower total asset turnover ratio may signify that the company is not effectively utilizing its total assets to generate sales, while a higher ratio implies better efficiency in asset utilization.

Overall, the trend in both ratios indicates that Middlesex Water Co. may have experienced relatively stable efficiency in leveraging its fixed assets and total assets to generate sales over the past five years. Additional analysis and comparison with industry benchmarks may provide further insights into the company's performance in this area.