OGE Energy Corporation (OGE)

Short-term

Turnover ratios

Inventory turnover indicates how efficiently a company manages its inventory levels. Oge Energy Corp.'s inventory turnover has been declining over the past eight quarters, from 5.75 in Q4 2022 to 2.21 in Q4 2023. This suggests a decrease in the frequency of inventory turnover, possibly indicating excess or obsolete inventory.

Receivables turnover measures how quickly a company collects cash from its customers. Oge Energy Corp.'s receivables turnover has fluctuated but generally trended upwards, from 9.78 in Q4 2022 to 8.92 in Q4 2023. This indicates an improvement in collecting cash from customers.

Payables turnover assesses how quickly a company pays its suppliers. Oge Energy Corp.'s payables turnover has shown some variability but remained within a similar range over the quarters provided, with the highest value in Q4 2023 at 4.91. This suggests a consistent payment schedule to suppliers.

Working capital turnover is unavailable in the data provided. This ratio is used to measure how efficiently a company utilizes its working capital to generate revenue. Without the specific values, it is challenging to assess Oge Energy Corp.'s performance in this aspect.

Overall, Oge Energy Corp. has shown mixed performance in its activity ratios, with improvements in receivables turnover but declining trends in inventory turnover. Payables turnover has been relatively stable. Further analysis combining these ratios with other financial metrics would provide a more comprehensive view of the company's operational efficiency.

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Average number of days

The activity ratios of Oge Energy Corp. provide insights into the efficiency of the company's operations in managing its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows an increase over the quarters, from 63.52 days in Q4 2022 to 165.26 days in Q4 2023. This indicates that the company is holding inventory for a longer period, which may tie up working capital and impact cash flow. Oge Energy Corp. should closely monitor and possibly streamline its inventory management to optimize its holdings.

2. Days of Sales Outstanding (DSO):
- DSO has fluctuated throughout the quarters, with a high of 57.49 days in Q3 2023 and a low of 31.84 days in Q1 2022. Generally, a lower DSO suggests faster collection of receivables, which is positive for cash flow. However, the recent increase in DSO may indicate challenges in collecting payments promptly. Oge Energy Corp. should focus on improving its credit management and collection processes to reduce DSO.

3. Number of Days of Payables:
- The days of payables also show variability, ranging from 69.52 days in Q3 2022 to 110.66 days in Q4 2023. A higher number of days of payables implies that the company is taking longer to pay its suppliers, which can be advantageous for cash flow management. However, excessively extending payables could strain supplier relationships. Oge Energy Corp. should strike a balance between maximizing payment terms and maintaining positive vendor relationships.

In summary, Oge Energy Corp. should address the increasing trend in DOH, the fluctuating DSO, and the variability in days of payables to enhance its operational efficiency and cash flow management. Monitoring and optimizing these activity ratios can help the company improve working capital utilization and overall financial performance.

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Long-term

The fixed asset turnover ratio for Oge Energy Corp. has gradually declined from 0.32 in Q4 2022 to 0.24 in Q4 2023, indicating a decrease in the efficiency of the company's fixed assets to generate sales over the period. This trend suggests that the company may be experiencing challenges in maximizing the utilization of its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio has also shown a decreasing trend, declining from 0.27 in Q4 2022 to 0.21 in Q4 2023. This indicates that the company's overall efficiency in generating sales from its total assets has weakened over the period, which could signal potential inefficiencies in the utilization of the company's total assets to generate revenue.

Overall, the declining trends in both the fixed asset turnover and total asset turnover ratios for Oge Energy Corp. suggest a potential inefficiency in utilizing assets to generate sales, which may require further analysis to identify underlying factors contributing to the decreasing activity ratios.