PPL Corporation (PPL)

Short-term

Turnover ratios

PPL Corporation's activity ratios provide insight into how efficiently the company manages its inventory, receivables, payables, and working capital.

1. Inventory Turnover: PPL Corporation's inventory turnover ratio has shown an increasing trend from 2.15 in 2020 to 2.37 in 2021, 2.62 in 2022, but then decreased to 1.47 in 2023 and slightly improved to 1.55 in 2024. The overall trend indicates a moderate efficiency in managing and selling inventory over the years.

2. Receivables Turnover: The company's receivables turnover ratio demonstrates fluctuation, with a notable increase from 6.21 in 2020 to 9.02 in 2021 before declining to 7.55 in 2022, 6.81 in 2023, and then rebounding to 8.16 in 2024. This suggests variations in the efficiency of collecting receivables during the period.

3. Payables Turnover: PPL Corporation's payables turnover ratio has fluctuated slightly, with a rise from 0.87 in 2020 to 1.12 in 2021, followed by a decrease to 0.97 in 2022, and further declines to 0.67 in 2023 and 0.66 in 2024. The trend indicates changes in how the company manages its payables and its relationships with suppliers.

4. Working Capital Turnover: The data provided does not include information for Working Capital Turnover in 2022, 2023, and 2024. However, the ratio improved significantly from 0.94 in 2020 to 2.15 in 2021, implying that the company efficiently utilized its working capital to generate revenue in the period analyzed.

Overall, PPL Corporation's activity ratios demonstrate varying levels of efficiency in managing its operational assets and liabilities over the years, with some fluctuations in performance. It is important for the company to assess these ratios regularly to ensure effective management of its resources and maximize profitability.

---

Average number of days

PPL Corporation's activity ratios indicate the efficiency with which the company manages its inventory, collects receivables, and pays its payables.

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows a decrease from 169.85 days in 2020 to 139.39 days in 2022, indicating an improvement in inventory management efficiency.
- However, there is a significant increase to 248.08 days in 2023 and then a slight decrease to 235.80 days in 2024, which may suggest challenges in managing inventory levels.

2. Days of Sales Outstanding (DSO):
- The DSO ratio shows a decrease from 58.74 days in 2020 to 40.46 days in 2021, reflecting faster collection of receivables.
- There is a slight increase to 48.32 days in 2022, followed by 53.62 days in 2023, indicating a possible delay in collecting payments.
- The DSO improves to 44.73 days in 2024, suggesting a more efficient collection process.

3. Number of Days of Payables:
- The number of days of payables has fluctuated, with a significant decrease from 418.99 days in 2020 to 324.82 days in 2021, indicating a faster payment cycle.
- However, there is an increase to 377.90 days in 2022, followed by a substantial rise to 542.34 days in 2023 and 551.88 days in 2024, indicating a prolonged payables cycle.

Overall, PPL Corporation's activity ratios reflect mixed performance in managing inventory, receivables, and payables. It is essential for the company to monitor and improve these ratios to enhance operational efficiency and cash flow management.

---

Long-term

PPL Corporation's long-term activity ratios show a modest improvement in efficiency over the years. The fixed asset turnover ratio has increased from 0.22 in 2020 to 0.26 in 2024, indicating that the company is generating more revenue per dollar invested in fixed assets.

Similarly, the total asset turnover ratio has also shown a positive trend, rising from 0.11 in 2020 to 0.21 in 2024. This suggests that PPL Corporation is utilizing its total assets more effectively to generate sales.

Overall, the improving trend in both fixed asset turnover and total asset turnover ratios indicates that PPL Corporation is becoming more efficient in using its assets to drive revenue growth over the long term.