Middlesex Water Company (MSEX)

Short-term

Turnover ratios

Middlesex Water Company's activity ratios provide insights into its efficiency in managing inventory, receivables, payables, and working capital.

1. Inventory Turnover: The company's inventory turnover ratio has been relatively stable over time, ranging from 7.17 to 17.73. A higher inventory turnover indicates that the company is able to sell its inventory quickly, which is generally favorable.

2. Receivables Turnover: Middlesex Water Company's receivables turnover ratio fluctuates between 5.08 and 7.29. This ratio reflects how effectively the company collects on credit sales. A higher turnover implies faster collection of receivables, which is a positive indicator.

3. Payables Turnover: The payables turnover ratio shows how quickly the company pays its suppliers. Middlesex Water Company's ratio varies between 1.26 and 4.99. A lower ratio may indicate that the company is taking longer to pay its payables, which could have working capital implications.

4. Working Capital Turnover: The company's working capital turnover was not available for several reporting periods but showed significant improvement in December 2023 and September 2023, with values of 34.11 and 11.09, respectively. This increase suggests that the company may be utilizing its working capital more efficiently during these periods.

Overall, a detailed analysis of these activity ratios can help stakeholders evaluate Middlesex Water Company's operational efficiency and management of key components like inventory, receivables, payables, and working capital.

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Average number of days

Middlesex Water Company's activity ratios provide insights into how efficiently the company is managing its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH): Middlesex Water Company's DOH has shown some fluctuations over the years, ranging from 20.59 days to 69.42 days. A lower number of days indicates that the company is effectively managing its inventory levels, ensuring that products are not sitting idle for extended periods. However, the significant increase in DOH at the end of 2024 to 69.42 days may indicate potential issues with inventory management that need further analysis.

2. Days of Sales Outstanding (DSO): The DSO for Middlesex Water Company has varied between 50.05 days and 71.90 days. A lower DSO indicates that the company is efficient in collecting payments from customers, while a higher DSO may suggest delays in receiving payments. The company should aim to maintain a balance between prompt collection and maintaining good customer relationships.

3. Number of Days of Payables: Middlesex Water Company's payables turnover has shown fluctuations ranging from 73.14 days to 289.81 days. A higher number of days indicates that the company is taking longer to pay its suppliers, which may strain vendor relationships. However, a lower number of days may indicate that the company is taking advantage of favorable credit terms.

In conclusion, Middlesex Water Company should monitor these activity ratios closely to ensure efficient management of inventory, receivables, and payables, which are crucial for maintaining a healthy cash flow and overall financial performance.

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Long-term

The long-term activity ratios of Middlesex Water Company can provide insights into how efficiently the company is utilizing its assets to generate revenue:

1. Fixed Asset Turnover: This ratio measures how effectively the company is using its fixed assets to generate sales. For Middlesex Water Company, the ratio has been relatively stable around 0.16 to 0.17 over the past few years. A higher ratio indicates better efficiency in utilizing fixed assets to generate sales.

2. Total Asset Turnover: This ratio signifies the company's ability to generate sales from all its assets, both fixed and current. Middlesex Water Company's total asset turnover ratio has fluctuated between 0.13 to 0.15 during the period analyzed, indicating varying levels of asset utilization over time.

Overall, while the company shows consistency in its fixed asset turnover, the total asset turnover reflects some fluctuations. Regular monitoring and analysis of these ratios can help assess the efficiency of asset utilization and identify potential areas for improvement in driving revenue generation.