One Gas Inc (OGS)

Short-term

Turnover ratios

ONE Gas Inc's activity ratios provide insight into how efficiently the company manages its assets and liabilities to generate revenue and support operations. The analysis of the activity ratios is as follows:

1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company's inventory is sold and replaced over a period. A higher ratio indicates efficient inventory management.
- ONE Gas Inc's inventory turnover has been relatively stable over the past five years, ranging from 3.30 to 4.30 times.
- The consistent inventory turnover suggests that ONE Gas Inc effectively manages its inventory levels to meet demand and avoid excess stock.

2. Receivables Turnover:
- The receivables turnover ratio reflects how quickly a company collects payments from its customers. A higher ratio indicates effective credit and collection policies.
- ONE Gas Inc's receivables turnover has fluctuated over the years, with a peak in 2023 at 6.82 times and a low of 4.65 times in 2022.
- The overall trend shows variations in collecting payments from customers, which may be influenced by changes in credit terms or customer payment behavior.

3. Payables Turnover:
- The payables turnover ratio measures how quickly a company pays its suppliers. A higher ratio suggests efficient management of trade payables.
- ONE Gas Inc's payables turnover has been relatively consistent over the years, ranging from 3.00 to 5.71 times.
- The stable payables turnover indicates that ONE Gas Inc maintains a balanced approach in managing its payables to support operations without causing strain on cash flows.

4. Working Capital Turnover:
- The working capital turnover ratio assesses how effectively a company utilizes its working capital to generate sales revenue. A higher ratio indicates better utilization of resources.
- The data provided includes missing values for certain years, making it challenging to assess the trend accurately. However, there was a significant increase in 2022 to 91.45 before missing data points.
- The spike in 2022 suggests a potential improvement in utilizing working capital to drive sales, although further information is needed to confirm the trend over time.

In summary, ONE Gas Inc's activity ratios demonstrate efficient management of inventory and payables, with some variability in receivables turnover. The working capital turnover shows potential positive performance in 2022, although more data is required for a comprehensive analysis.

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Average number of days

1. Days of inventory on hand (DOH):
- The trend in DOH for ONE Gas Inc has been relatively stable over the past five years, ranging from 84.88 days in 2019 to 110.46 days in 2021.
- In 2023, ONE Gas Inc held inventory for an average of 85.18 days before it was sold, which is slightly higher than the previous year but lower than the peak in 2021.
- The company's inventory management appears to be efficient, as it is able to sell its inventory within a reasonable timeframe without excessive holding periods.

2. Days of sales outstanding (DSO):
- The DSO for ONE Gas Inc has fluctuated over the past five years, with the lowest being 57.42 days in 2019 and the highest at 78.41 days in 2022.
- In 2023, the company collected its receivables in an average of 53.53 days, showing an improvement compared to the previous year.
- This decrease in DSO indicates that ONE Gas Inc has been more effective in collecting payments from customers, which can help improve cash flow and liquidity.

3. Number of days of payables:
- The days of payables for ONE Gas Inc have varied over the years, with a significant increase from 63.93 days in 2019 to 121.77 days in 2021, before decreasing to 89.46 days in 2023.
- In 2023, the company took an average of 89.46 days to pay its suppliers, which is a notable improvement from the peak in 2021.
- This suggests that ONE Gas Inc may have negotiated better payment terms with its suppliers, allowing for more efficient management of its working capital.

Overall, the activity ratios for ONE Gas Inc indicate that the company has effectively managed its inventory, accounts receivable, and accounts payable over the years, showcasing efficient operations and cash flow management.

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Long-term

The long-term activity ratios for ONE Gas Inc provide insights into the efficiency of the company's asset management over the last five years.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how efficiently a company generates sales from its fixed assets.
- ONE Gas Inc's fixed asset turnover has fluctuated over the past five years, with a peak in 2022 at 0.46 and a low in 2020 at 0.31.
- The decreasing trend in fixed asset turnover from 2022 to 2023 may indicate challenges in effectively utilizing its fixed assets to generate revenue.
- The company's fixed asset turnover ratios generally suggest that it has been less efficient in generating sales from its fixed assets compared to previous years.

2. Total Asset Turnover:
- The total asset turnover ratio shows how well a company utilizes its total assets to generate revenue.
- ONE Gas Inc's total asset turnover has also varied, with the highest ratio in 2019 at 0.29 and the lowest in 2021 at 0.22.
- The trend of total asset turnover ratios indicates that the company has struggled to efficiently use its total assets to generate sales over the past five years.
- The significant drop in total asset turnover from 2020 to 2021 may highlight challenges in asset optimization and revenue generation during that period.

In summary, the analysis of ONE Gas Inc's long-term activity ratios suggests that the company has faced some inefficiencies in utilizing both fixed assets and total assets to drive sales growth. Further investigation into the company's asset management strategies and operational efficiency may be warranted to address these challenges and improve overall performance.