UGI Corporation (UGI)

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 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Inventory turnover 17.91 22.68 25.00 22.62 14.69 12.12 13.11 14.23 9.91 8.78 16.90 18.45 15.87 17.15 19.66 21.21 10.32 6.73 4.16 0.85
Receivables turnover 6.98 9.77 9.54 6.46 6.26 8.05 7.06 4.99 5.15 7.39 7.31 5.22 5.82 8.96 9.76 6.64 7.05 11.43 9.54 6.11
Payables turnover 10.66 16.02 18.95 12.94 8.96 9.05 7.71 6.19 5.58 4.92 8.64 7.89 6.95 8.70 10.34 8.21 4.28 3.53 2.01 0.29
Working capital turnover — — — 20.19 134.11 7.44 6.67 5.48 9.63 7.65 10.55 13.89 78.12 — — — — — 60.56 18.67

Activity ratios provide insight into how efficiently a company manages its resources. Let's analyze UGI Corp.'s activity ratios:

1. Inventory turnover:
UGI Corp. has shown a consistent improvement in inventory turnover over the quarters, increasing from 8.98 in Q4 2022 to 16.02 in Q4 2023. This indicates that the company is selling its inventory more frequently, potentially reducing holding costs and improving cash flow.

2. Receivables turnover:
The receivables turnover ratio reflects how quickly UGI Corp. collects payments from its customers. The company's receivables turnover has fluctuated but generally improved from 4.79 in Q2 2022 to 9.43 in Q4 2023. This signifies that the company is managing its accounts receivable more efficiently.

3. Payables turnover:
UGI Corp.'s payables turnover has also shown improvement, increasing from 4.48 in Q2 2022 to 11.32 in Q4 2023. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently, which may signify improved supplier relationships or efficient cash management.

4. Working capital turnover:
The working capital turnover ratio, which is not available for all quarters, shows how effectively the company is utilizing its working capital to generate sales. The significant rise in Q1 2023 to 134.11 suggests UGI Corp. generated substantially more revenue relative to its working capital in that quarter.

Overall, UGI Corp.'s activity ratios indicate improvements in inventory turnover, receivables turnover, and payables turnover. These trends suggest that the company may be effectively managing its resources and optimizing its operations to enhance efficiency and financial performance.

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 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 20.38 16.09 14.60 16.14 24.84 30.11 27.84 25.66 36.85 41.59 21.60 19.78 22.99 21.28 18.57 17.21 35.36 54.22 87.82 431.24
Days of sales outstanding (DSO) days 52.31 37.37 38.24 56.54 58.34 45.33 51.69 73.14 70.83 49.41 49.94 69.95 62.77 40.73 37.39 54.96 51.78 31.95 38.24 59.77
Number of days of payables days 34.24 22.78 19.26 28.21 40.76 40.34 47.32 58.99 65.43 74.22 42.25 46.27 52.50 41.94 35.29 44.45 85.26 103.48 181.44 1,266.72

UGI Corp.'s activity ratios indicate its efficiency in managing inventory, collecting receivables, and paying its payables. The trend analysis of Days of Inventory on Hand (DOH) shows a decrease from Q1 2023 to Q4 2023, followed by an increase in Q1 2024. This suggests that UGI may have been more efficient in managing its inventory at the end of 2023 but experienced an increase in inventory levels in Q1 2024.

Days of Sales Outstanding (DSO) indicate the average number of days it takes for the company to collect its accounts receivable. UGI Corp. saw a decrease in DSO from Q1 to Q2 2023, followed by fluctuations in subsequent quarters. The increase in Q4 2023 and Q1 2024 indicates a longer collection period for receivables, which may require closer monitoring to improve collection efficiency.

The Number of Days of Payables reflects how long UGI takes to pay its suppliers. There was a notable decrease in payables days from Q2 to Q3 2022, but the trend has been more stable in recent quarters. The longer payables period in Q3 2022 and Q2 2022 suggests that UGI may be taking longer to settle its payables, which can impact cash flow management.

Overall, the analysis of UGI Corp.'s activity ratios indicates fluctuations in its inventory management, accounts receivable collection, and payables settlement. Continuous monitoring and potential operational adjustments may be necessary to improve efficiency in working capital management and optimize the cash conversion cycle.

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 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Fixed asset turnover 0.96 1.04 1.13 1.19 1.25 1.26 1.23 1.16 1.08 0.99 1.01 0.97 0.92 0.94 0.97 0.99 1.05 1.09 1.24 1.27
Total asset turnover 0.53 0.58 0.62 0.60 0.60 0.58 0.56 0.51 0.49 0.45 0.48 0.46 0.44 0.47 0.48 0.48 0.50 0.55 0.62 0.61

The fixed asset turnover ratio for UGI Corp. has been declining gradually from 1.26 in Q4 2022 to 0.96 in Q1 2024. This indicates that the company is generating less revenue for each dollar invested in fixed assets over time, which may be a cause for concern as it suggests that the efficiency of utilizing fixed assets in generating sales is decreasing.

On the other hand, the total asset turnover ratio has been relatively stable around 0.60 in the past few quarters, with a slight increase to 0.53 in Q1 2024. This ratio indicates the company's ability to generate sales from its total assets. Although the ratio is lower compared to the industry average, the stability suggests that the company is effectively utilizing its total assets to generate revenue.

Overall, the declining trend in the fixed asset turnover ratio coupled with the stable total asset turnover ratio may imply that UGI Corp. needs to focus on optimizing the utilization of its fixed assets to improve its efficiency in generating revenue. Long-term strategies should be considered to potentially enhance the productivity of fixed assets for sustainable growth and profitability in the future.