NiSource Inc (NI)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.78 | 3.28 | 3.48 | 3.74 | 3.61 |
| Receivables turnover | 5.59 | 5.13 | 5.31 | 3.37 | 5.59 |
| Payables turnover | 2.53 | 2.74 | 2.48 | 2.55 | 2.30 |
| Working capital turnover | — | — | — | — | — |
1. Inventory Turnover:
NiSource Inc's inventory turnover has been relatively stable over the past five years, ranging from 2.77 to 3.61 times. This ratio indicates how efficiently the company manages its inventory levels. A higher turnover signifies a more efficient use of inventory. NiSource's inventory turnover has shown slight fluctuations but has stayed within a reasonable range.
2. Receivables Turnover:
The receivables turnover ratio for NiSource Inc has shown variability over the years, ranging from 5.00 to 5.93 times. This ratio reflects how quickly the company collects payments from customers. A higher turnover indicates that the company is efficient in collecting receivables. While there have been fluctuations in this ratio, it generally indicates that NiSource is effective in managing its accounts receivable.
3. Payables Turnover:
NiSource Inc's payables turnover has ranged from 1.88 to 2.35 times over the last five years. This ratio shows how quickly the company pays its suppliers. A higher turnover implies that the company is managing its payables efficiently. NiSource's payables turnover has shown some variability, but it has generally maintained a moderate level over the years.
4. Working Capital Turnover:
Unfortunately, the data provided does not include the working capital turnover for NiSource Inc for any of the years. This ratio measures how efficiently a company utilizes its working capital to generate sales. Without this information, it is challenging to assess NiSource's efficiency in utilizing its working capital to support its revenue-generating activities.
Overall, based on the available activity ratios, NiSource Inc appears to be efficiently managing its inventory, receivables, and payables. However, the absence of working capital turnover data limits a comprehensive analysis of the company's overall operational efficiency.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 96.69 | 111.30 | 105.02 | 97.60 | 101.00 |
| Days of sales outstanding (DSO) | days | 65.31 | 71.20 | 68.75 | 108.38 | 65.35 |
| Number of days of payables | days | 143.99 | 133.15 | 146.94 | 143.32 | 158.39 |
The activity ratios for NiSource Inc indicate how efficiently the company manages its inventory, collects its receivables, and pays its suppliers.
1. Days of Inventory on Hand (DOH):
- The trend of DOH has decreased from 2019 to 2023, except for a slight increase in 2022. This suggests that NiSource has been able to manage its inventory more efficiently over the years, holding less inventory on average before selling it.
- However, the company still holds inventory for a relatively long period, with an average of around 120 days in recent years. This may indicate a need for better inventory management to avoid excess or obsolete inventory.
2. Days of Sales Outstanding (DSO):
- The DSO has fluctuated over the years, with a decrease from 2022 to 2023. This ratio measures how quickly the company collects its receivables from customers.
- NiSource has been able to collect its receivables faster on average compared to earlier years, which is a positive sign of efficient accounts receivable management.
3. Number of Days of Payables:
- The days of payables have also varied, with an increase in 2021 followed by a decrease in 2022 and a subsequent increase in 2023. This ratio reflects how long the company takes to pay its suppliers.
- NiSource has shown some fluctuations in its payment period to suppliers, but the average has been around 170 days in recent years. A longer payment period can indicate a favorable trade credit policy, but it is essential to ensure timely payments to maintain good relationships with suppliers.
Overall, while NiSource has improved its inventory and accounts receivable management over the years, there may still be opportunities to optimize its inventory levels further and ensure consistent and efficient payment practices to suppliers.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.22 | 0.27 | 0.25 | 0.23 | 0.40 |
| Total asset turnover | 0.16 | 0.20 | 0.18 | 0.17 | 0.30 |
The long-term activity ratios for NiSource Inc, specifically the fixed asset turnover and total asset turnover, show the efficiency with which the company is utilizing its assets to generate sales revenue.
The fixed asset turnover has been relatively stable over the past five years, ranging between 0.25 and 0.31. This ratio indicates that for every dollar invested in fixed assets, NiSource Inc is generating between $0.25 to $0.31 in sales revenue. A lower fixed asset turnover may suggest underutilization of fixed assets, while a higher ratio could imply efficient use of these assets.
The total asset turnover has also remained relatively consistent, ranging from 0.18 to 0.23 over the period. This ratio reflects the company's ability to generate sales revenue in relation to its total assets. A lower total asset turnover could indicate inefficiency in asset utilization, while a higher ratio suggests effective asset management.
Overall, based on the long-term activity ratios, NiSource Inc has maintained relatively stable levels of asset turnover over the past five years, indicating a consistent level of efficiency in utilizing its fixed and total assets to generate sales revenue.