National Fuel Gas Company (NFG)

Short-term

Turnover ratios

The inventory turnover ratio for National Fuel Gas Company has shown an improving trend over the past five years, indicating that the company is managing its inventory more efficiently. In 2024, the inventory turnover ratio stands at 9.51, reflecting the number of times the company's inventory was sold and replaced during the year. This increase from 6.84 in 2023 suggests that the company is selling its inventory at a faster rate.

The payables turnover ratio, which measures how efficiently a company is managing its accounts payable, has also demonstrated an improving trend over the same period. In 2024, the payables turnover ratio is 4.77, indicating that National Fuel Gas Company is paying its suppliers more frequently compared to previous years. This may suggest better cash flow management and favorable relationships with suppliers.

It is worth noting that the receivables turnover ratio data is not provided, which limits a complete analysis of how efficiently the company is collecting its accounts receivable. Additionally, the working capital turnover ratio data is also not available for all years, preventing a comprehensive evaluation of how effectively the company is utilizing its working capital to generate revenue.

Overall, based on the available data, National Fuel Gas Company appears to be improving its inventory and payables management, which can have positive implications for its overall financial performance and operational efficiency.

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Average number of days

The activity ratios of National Fuel Gas Company provide insight into the efficiency of its operations in managing inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
The days of inventory on hand have shown improvement over the last five years, decreasing from 90.70 days in 2020 to 38.39 days in 2024. This indicates that the company has been more effective in managing its inventory levels and turning over inventory quickly. A lower DOH is generally considered favorable as it signifies efficient inventory management, lower holding costs, and potentially higher sales.

2. Days of Sales Outstanding (DSO):
Unfortunately, the data for days of sales outstanding is not provided for the years under consideration. DSO measures how quickly the company collects payments from its customers. A lower DSO suggests faster cash collection, which is beneficial for improving cash flow and liquidity.

3. Number of Days of Payables:
The number of days of payables has fluctuated over the years, with a noticeable decrease from 214.66 days in 2021 to 76.60 days in 2024. A lower number of days of payables indicates that the company is taking less time to pay its suppliers, which can be seen as a positive sign in terms of maintaining good vendor relationships and potentially taking advantage of early payment discounts.

Overall, the trends in these activity ratios highlight National Fuel Gas Company's efforts to enhance operational efficiency and potentially improve working capital management.

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Long-term

The fixed asset turnover ratio measures how efficiently a company generates revenue from its long-term assets. In the case of National Fuel Gas Company, the trend in fixed asset turnover over the past five years shows a slight decline from 0.26 in 2020 to 0.26 in 2024. This implies that the company is generating less revenue from its fixed assets over this period, which may indicate underutilization or inefficiency in managing its long-term assets.

On the other hand, the total asset turnover ratio reflects the company's ability to generate sales from all its assets, both long-term and short-term. National Fuel Gas Company's total asset turnover ratio has also experienced a downward trend, decreasing from 0.22 in 2020 to 0.23 in 2024. This indicates a declining efficiency in generating sales from all its assets, which could suggest potential inefficiencies in managing its overall asset base.

Overall, the decreasing trends in both fixed asset turnover and total asset turnover ratios for National Fuel Gas Company over the past five years may raise concerns about the company's operational efficiency and asset utilization. Further analysis and comparison with industry benchmarks are needed to fully evaluate the implications of these long-term activity ratios on the company's financial performance and operational effectiveness.