ONEOK Inc (OKE)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 17.80 | 18.67 | 41.46 | 28.65 | 22.43 |
| Receivables turnover | 9.43 | 9.86 | 14.61 | 11.47 | 10.29 |
| Payables turnover | 6.09 | 7.63 | 13.18 | 9.20 | 7.10 |
| Working capital turnover | — | — | — | — | 16.26 |
ONEOK Inc's inventory turnover ratio has shown an increasing trend from 22.43 in 2020 to 28.65 in 2021, peaking at 41.46 in 2022 before declining to 18.67 in 2023 and 17.80 in 2024. This indicates that the company's efficiency in managing inventory improved significantly in 2022 but then deteriorated in the following years, with a lower turnover rate suggesting potential inventory management issues or changes in sales patterns.
In terms of receivables turnover, the company's ratio saw a steady increase from 10.29 in 2020 to 11.47 in 2021 and further to 14.61 in 2022 before declining to 9.86 in 2023 and 9.43 in 2024. A higher receivables turnover ratio indicates that ONEOK Inc is collecting its receivables more frequently, suggesting effective credit management and strong customer collection policies.
For payables turnover, the company's ratio increased from 7.10 in 2020 to 9.20 in 2021 and significantly rose to 13.18 in 2022. However, it decreased to 7.63 in 2023 and further to 6.09 in 2024. A higher payables turnover ratio signifies that ONEOK Inc is paying its suppliers more frequently, which can signal good liquidity management and potentially better negotiated terms with suppliers.
ONEOK Inc did not report data for the working capital turnover ratio for the years beyond 2020. This ratio measures how effectively the company is using its working capital to generate sales revenue. A higher working capital turnover ratio indicates efficient utilization of working capital, while a declining ratio may suggest inefficiencies or changes in operational performance.
In conclusion, while the inventory turnover and payables turnover ratios fluctuated over the years, the receivables turnover ratio showed a more consistent trend of improvement followed by a slight decline. Further analysis of the working capital turnover ratio for later years would provide a more comprehensive assessment of ONEOK Inc's operational efficiency and management of working capital.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 20.51 | 19.55 | 8.80 | 12.74 | 16.27 |
| Days of sales outstanding (DSO) | days | 38.72 | 37.02 | 24.98 | 31.82 | 35.46 |
| Number of days of payables | days | 59.97 | 47.85 | 27.70 | 39.68 | 51.38 |
ONEOK Inc's activity ratios show the efficiency of the company in managing its operating cycle.
1. Days of Inventory on Hand (DOH):
- The DOH decreased from 16.27 days on December 31, 2020, to 8.80 days on December 31, 2022, indicating efficient inventory management.
- However, there was an increase in DOH to 20.51 days by December 31, 2024, which may suggest potential issues with inventory control or demand variability.
2. Days of Sales Outstanding (DSO):
- The DSO decreased from 35.46 days on December 31, 2020, to 24.98 days on December 31, 2022, reflecting a faster collection of receivables.
- The DSO then increased to 38.72 days by December 31, 2024, which could imply delayed collections or changes in customer payment patterns.
3. Number of Days of Payables:
- The number of days of payables decreased significantly from 51.38 days on December 31, 2020, to 27.70 days on December 31, 2022, indicating efficient management of payables.
- However, there was an increase in the number of days of payables to 59.97 days by December 31, 2024, which could potentially strain supplier relationships or indicate cash flow challenges.
Overall, fluctuations in these activity ratios demonstrate shifts in operational efficiency and effectiveness in managing working capital components over the years. Monitoring these ratios can provide insights into the company's liquidity, cash flow management, and overall financial health.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.48 | 0.51 | 1.12 | 0.86 | 0.45 |
| Total asset turnover | 0.34 | 0.38 | 0.92 | 0.70 | 0.37 |
Long-term activity ratios provide insights into how effectively a company is utilizing its assets to generate sales. TWO of the key long-term activity ratios for ONEOK Inc, the fixed asset turnover and total asset turnover, have shown varied performance over the years.
Fixed asset turnover, which measures the efficiency of using fixed assets to generate sales, increased from 0.45 in December 2020 to 1.12 in December 2022, indicating an improvement in asset utilization during this period. This suggests that ONEOK Inc was able to generate more revenue per dollar invested in fixed assets in 2022 compared to 2020. However, there was a notable decrease in this ratio to 0.51 in December 2023 and further to 0.48 in December 2024, which may signal a decline in the efficiency of utilizing fixed assets in generating revenue during these years.
On the other hand, total asset turnover, which reflects how efficiently the company is using all its assets to generate revenue, showed a similar trend. The ratio increased from 0.37 in December 2020 to 0.92 in December 2022, indicating a significant improvement in asset utilization over these years. However, there was a sharp decline in the total asset turnover ratio to 0.38 in December 2023 and further to 0.34 in December 2024, reflecting a decrease in the company's overall efficiency in generating sales with its total assets during these periods.
Overall, the fluctuating trends in both fixed asset turnover and total asset turnover ratios for ONEOK Inc suggest varying levels of asset utilization efficiency over the years, with periods of improvement followed by declines. Further analysis of the company's operational and strategic decisions may be needed to understand the factors driving these fluctuations and assess the long-term sustainability of its asset utilization strategies.