Ovintiv Inc (OVV)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Receivables turnover | 4.50 | 9.53 | 13.92 | 14.21 | 4.47 | 8.99 | 6.23 | 5.48 | 3.65 | 5.67 | 5.20 | 4.69 | 3.11 | 6.97 |
| Payables turnover | 2.18 | — | — | — | 2.86 | — | — | — | 3.38 | — | — | — | 21.06 | — |
| Working capital turnover | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
The activity ratios for Ovintiv Inc provide insights into how efficiently the company is managing its assets and liabilities.
1. Receivables turnover:
- The receivables turnover ratio indicates how many times a company collects its accounts receivable during a certain period.
- The ratio has shown fluctuations over the quarters, with significant variations between the quarters.
- In Q1 2023, the ratio spiked dramatically to 4,327. This could be an anomaly or a data error, as such a high value is unlikely in a realistic scenario.
- Generally, a higher receivables turnover ratio is favorable as it indicates that the company is collecting its outstanding receivables more quickly.
2. Payables turnover:
- The lack of data points for payables turnover in most quarters limits the analysis of how quickly Ovintiv Inc is paying its suppliers.
- Having more consistent data on payables turnover would provide a clearer picture of the company's payment practices.
3. Inventory turnover and Working capital turnover:
- Unfortunately, data for inventory turnover and working capital turnover is missing for all quarters, making it challenging to assess how efficiently Ovintiv is managing its inventory and working capital.
In conclusion, while the receivables turnover ratio provides some insights into Ovintiv Inc's accounts receivable management, the lack of data for other activity ratios limits the comprehensive analysis of the company's overall operational efficiency. To gain a more complete understanding of Ovintiv Inc's activity ratios, additional data for inventory turnover, payables turnover, and working capital turnover is needed.
Average number of days
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 81.16 | 38.31 | 26.23 | 25.68 | 81.70 | 40.61 | 58.57 | 66.59 | 99.96 | 64.40 | 70.16 | 77.88 | 117.35 | 52.39 |
| Number of days of payables | days | 167.63 | — | — | — | 127.62 | — | — | — | 108.05 | — | — | — | 17.34 | — |
Days of inventory on hand (DOH) data is missing and cannot be analyzed.
Days of sales outstanding (DSO) for Ovintiv Inc has been fluctuating over the quarters. In Q4 2023, the company's DSO decreased to 49.25 days from 51.36 days in Q3 2023, indicating an improvement in collecting accounts receivable. However, compared to Q2 2023 where DSO was 39.10 days, there has been a slight increase in the time taken to collect receivables in Q4 2023.
The number of days of payables data is not provided, so the analysis of the company's payment cycle efficiency cannot be performed.
Overall, Ovintiv Inc should continue to monitor and manage its accounts receivable collection process to ensure timely payments from customers, which can positively impact the company's cash flow and liquidity.
Long-term
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 0.74 | 0.75 | 0.83 | 1.32 | 1.32 | 1.39 | 1.18 | 0.98 | 0.99 | 0.80 | 0.73 | 0.56 | 0.64 | 0.60 |
| Total asset turnover | 0.54 | 0.55 | 0.61 | 0.86 | 0.83 | 0.88 | 0.73 | 0.59 | 0.62 | 0.50 | 0.45 | 0.36 | 0.42 | 0.40 |
Ovintiv Inc's long-term activity ratios, specifically the fixed asset turnover and total asset turnover, provide insights into how efficiently the company is utilizing its assets to generate revenue.
Fixed asset turnover measures the company's ability to generate sales using its fixed assets. Ovintiv's fixed asset turnover has been fluctuating over the quarters, declining from 1.31 in Q4 2022 to 0.74 in Q4 2023. This indicates that the company is generating less revenue from its fixed assets. A fixed asset turnover below 1 may suggest underutilization of fixed assets or inefficiencies in the production process. It is essential to investigate further to understand the reasons behind the decline and take corrective actions accordingly.
Total asset turnover, on the other hand, reflects how well the company is utilizing all its assets, including both fixed and current assets, to generate sales. Ovintiv's total asset turnover has also shown variability, with a range from 0.58 in Q1 2022 to 0.86 in Q1 2023. A total asset turnover below 1 indicates that the company is generating less revenue relative to its total assets, which may suggest inefficiencies in asset management or sales generation.
In summary, Ovintiv Inc's long-term activity ratios suggest that the company may be facing challenges in efficiently using its assets to generate revenue, as reflected in the decreasing trend in both fixed asset turnover and total asset turnover over the quarters. Further analysis and strategic measures may be necessary to improve asset utilization and enhance overall operational efficiency.