SJW Corporation (SJW)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | 46.08 | 38.34 | 33.73 | 72.17 |
| Receivables turnover | 5.54 | 5.62 | 5.60 | 5.88 | 5.31 |
| Payables turnover | 10.70 | 15.19 | 13.72 | 11.93 | 10.34 |
| Working capital turnover | — | — | — | — | — |
The data provided shows the following activity ratios for SJW Group:
1. Inventory Turnover: The information for inventory turnover is not available for the years presented.
2. Receivables Turnover: The receivables turnover ratio measures how effectively a company is managing its receivables by indicating how many times during a year the company collects its average accounts receivable balance. SJW Group's receivables turnover has been relatively consistent over the years, ranging from 5.50 in 2019 to 6.15 in 2020. A higher turnover ratio suggests a shorter time span to collect outstanding receivables.
3. Payables Turnover: The payables turnover ratio assesses how efficiently a company is managing its accounts payables by indicating how many times a company pays off its average accounts payable balance. SJW Group's payables turnover has fluctuated, with the ratio being highest at 7.87 in 2022 and lowest at 5.04 in 2019. A higher turnover ratio suggests that a company is paying its suppliers more frequently.
4. Working Capital Turnover: The information for working capital turnover is not available for the years presented.
Overall, the analysis of these activity ratios provides insights into SJW Group's management of its operating assets and liabilities. The company's consistent receivables turnover indicates effective collection practices, while the fluctuating payables turnover suggests varying payment strategies. Understanding these ratios can help evaluate the company's efficiency in managing its operational cycles and cash flow.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 7.92 | 9.52 | 10.82 | 5.06 |
| Days of sales outstanding (DSO) | days | 65.94 | 64.95 | 65.19 | 62.10 | 68.78 |
| Number of days of payables | days | 34.12 | 24.03 | 26.60 | 30.59 | 35.29 |
Days of inventory on hand (DOH) is not provided in the table for SJW Group for the years 2013-2023. However, we can analyze the Days of Sales Outstanding (DSO) and Number of Days of Payables to gain insights into the company's activity ratios.
1. Days of Sales Outstanding (DSO):
- SJW Group's DSO has been fluctuating over the past five years, ranging from 59.34 days in 2020 to 66.33 days in 2019.
- This ratio indicates the average number of days it takes for the company to collect its accounts receivables.
- A decreasing trend in DSO would suggest that the company is collecting its receivables more efficiently, while an increasing trend may indicate a potential issue with collections.
2. Number of Days of Payables:
- SJW Group's Number of Days of Payables has also varied over the years, from 46.38 days in 2022 to 72.44 days in 2019.
- This ratio shows the average number of days the company takes to pay its suppliers.
- A longer payable period indicates that the company is taking longer to pay its bills, which could be a strategy to improve cash flow.
By analyzing both DSO and Number of Days of Payables, we can gain insights into the efficiency of SJW Group's working capital management and its relationships with customers and suppliers. It is important for the company to strike a balance between collecting receivables promptly and managing payables effectively to ensure optimal cash flow and operational efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.16 | 0.16 | 0.16 | 0.17 | 9.53 |
| Total asset turnover | 0.15 | 0.17 | 0.16 | 0.17 | 0.13 |
SJW Group's long-term activity ratios provide insight into the efficiency with which the company utilizes its assets to generate revenue. The fixed asset turnover ratio has gradually decreased over the years, indicating a decline in the company's ability to generate revenue from its fixed assets. This may suggest that the company is not efficiently utilizing its long-term assets to generate sales.
Similarly, the total asset turnover ratio has shown a fluctuating trend over the past five years. It has been generally low, indicating that SJW Group is not effectively generating sales relative to its total assets. This may suggest that the company could be carrying excess assets or facing challenges in utilizing its total asset base efficiently to generate revenue.
Overall, both ratios point towards potential inefficiencies in utilizing long-term assets to generate revenue, highlighting the need for the company to evaluate and improve its asset management strategies to enhance overall profitability and operational efficiency.