OGE Energy Corporation (OGE)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 9.89 | 20.54 | 65.20 | 52.54 | 26.71 |
| Receivables turnover | 8.92 | 9.78 | 15.89 | 9.09 | 9.73 |
| Payables turnover | 5.67 | 4.98 | 9.66 | 7.63 | 6.34 |
| Working capital turnover | — | — | — | — | — |
Oge Energy Corp.'s activity ratios provide insights into the efficiency of the company's management of inventory, receivables, and payables over the past five years.
- Inventory Turnover: This ratio indicates how many times a company sells and replaces its inventory during a period. Oge Energy Corp.'s inventory turnover has fluctuated over the years, ranging from 2.21 to 13.42. A higher turnover generally indicates efficient inventory management, with the company being able to sell its products more frequently.
- Receivables Turnover: This ratio measures how effectively a company extends credit and collects debts. Oge Energy Corp.'s receivables turnover has ranged from 8.92 to 15.89, indicating that the company has been efficient in collecting payments from its customers.
- Payables Turnover: This ratio reflects how quickly a company pays its suppliers. Oge Energy Corp.'s payables turnover has varied between 2.56 and 7.76 over the years, indicating different payment practices. A higher turnover suggests the company is making payments more quickly.
- Working Capital Turnover: Unfortunately, data for working capital turnover is not provided for Oge Energy Corp., which could have offered insights into how effectively the company utilizes its working capital to generate sales revenue.
Overall, analyzing these activity ratios can help assess Oge Energy Corp.'s operational efficiency and effectiveness in managing its resources and relationships with suppliers and customers.
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 | 36.91 | 17.77 | 5.60 | 6.95 | 13.67 |
| Days of sales outstanding (DSO) | days | 40.90 | 37.30 | 22.97 | 40.16 | 37.52 |
| Number of days of payables | days | 64.37 | 73.31 | 37.78 | 47.87 | 57.53 |
Oge Energy Corp.'s activity ratios paint a picture of how efficiently the company is managing its inventory, collecting receivables, and paying its payables.
1. Days of inventory on hand (DOH): This ratio indicates how many days it takes for Oge Energy Corp. to turn its inventory into sales. A higher DOH could suggest that the company is carrying excess inventory, tying up capital. Oge Energy Corp.'s DOH has been fluctuating significantly over the years, with a sharp increase in 2023 compared to previous years. This may indicate a need for better inventory management practices in that year.
2. Days of sales outstanding (DSO): DSO reflects how long it takes for the company to collect payment from customers after making sales. A lower DSO is generally preferred as it indicates faster cash conversion. Oge Energy Corp.'s DSO has been relatively stable over the years, hovering around 40 days. This suggests that the company has been consistent in its collections processes.
3. Number of days of payables: This ratio reveals how long Oge Energy Corp. takes to pay its suppliers and creditors. A longer period could indicate that the company is effectively using supplier financing to manage cash flow. The number of days of payables has varied over the years, with a significant increase in 2020, but a decrease in 2021 and 2023. This could reflect changes in the company's payment terms or supplier relationships.
In summary, Oge Energy Corp. should focus on optimizing its inventory management in 2023 due to the increase in days of inventory on hand. However, the stable DSO and fluctuating but improving payables indicate that the company has been effective in collecting receivables and managing payables in recent years.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.24 | 0.32 | 0.37 | 0.23 | 0.25 |
| Total asset turnover | 0.21 | 0.27 | 0.29 | 0.20 | 0.20 |
Oge Energy Corp.'s long-term activity ratios, specifically the fixed asset turnover and total asset turnover, provide insights into the efficiency with which the company is utilizing its assets to generate revenue.
The fixed asset turnover ratio has exhibited fluctuating trends over the past five years, ranging from 0.23 in 2020 to 0.37 in 2021. In 2023, the ratio decreased to 0.24, indicating that the company generated $0.24 in revenue for every $1 invested in fixed assets during the year. This suggests a decline in the efficiency of utilizing fixed assets to generate sales, potentially signaling underutilization or depreciation of these long-term assets.
On the other hand, the total asset turnover ratio has also shown variations, with values ranging from 0.20 in 2019 and 2020 to 0.29 in 2021. In 2023, the total asset turnover ratio decreased to 0.21, indicating that the company generated $0.21 in revenue for every $1 of total assets during the year. This decrease in efficiency compared to the previous year could reflect challenges in effectively utilizing all assets, including both fixed and current assets, to drive sales growth.
Overall, the declining trend in both the fixed asset turnover and total asset turnover ratios over the years suggests potential inefficiencies in Oge Energy Corp.'s asset utilization and revenue generation processes. It may be beneficial for the company to assess its asset management strategies and operational efficiencies to improve long-term activity ratios and overall financial performance.