UNITIL Corporation (UTL)

Short-term

Turnover ratios

Unitil Corp.'s activity ratios provide insights into the efficiency of the company's operations and management of its working capital.

1. Inventory turnover: Unitil Corp. has shown consistent improvement in its inventory turnover ratio over the quarters analyzed, indicating that the company is efficiently managing its inventory levels. A higher inventory turnover ratio suggests that Unitil is selling its inventory faster, which can lead to improved cash flow and reduced carrying costs.

2. Receivables turnover: The receivables turnover ratio measures how efficiently Unitil Corp. is collecting its accounts receivable. The company has demonstrated an increasing trend in this ratio, indicating that it is collecting receivables at a faster rate. This can help improve cash flow and reduce the risk of bad debts.

3. Payables turnover: Unitil Corp. has also improved its payables turnover ratio, reflecting its ability to manage payables effectively. A higher payables turnover ratio suggests that the company is paying its suppliers in a timely manner, which can help maintain good relationships with vendors and potentially earn discounts for early payments.

4. Working capital turnover: The working capital turnover ratio was not provided for Q1-Q3 of 2023, but in Q4 2022, it was exceptionally high at 97.61. This indicates that Unitil Corp. is generating significant revenue relative to its working capital. However, without data for the other quarters of 2023, it is difficult to assess the trend in this ratio.

Overall, Unitil Corp.'s activity ratios reflect efficient management of inventory, receivables, and payables, which can positively impact the company's financial performance and liquidity.

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Average number of days

Unitil Corp.'s activity ratios indicate how efficiently the company manages its assets and liabilities.

1. Days of Inventory on Hand (DOH): This ratio measures how many days it takes for Unitil Corp. to sell its inventory. Over the past eight quarters, the DOH has ranged from 12.40 days to 17.73 days. The trend shows a slight increase in the most recent quarter, indicating a slightly slower rate of inventory turnover. Unitil Corp. may need to monitor its inventory levels to optimize efficiency and avoid potential inventory obsolescence.

2. Days of Sales Outstanding (DSO): DSO measures the average number of days it takes for Unitil Corp. to collect revenue after a sale is made. The DSO has fluctuated between 42.25 days and 63.58 days over the past eight quarters. A lower DSO is generally preferable as it indicates quicker collection of receivables. However, there was an anomalous spike in DSO in Q1 2023, which may warrant further investigation to identify the cause and implement strategies to improve collection efficiency.

3. Number of Days of Payables: This ratio reflects the average number of days it takes for Unitil Corp. to pay its suppliers. The number of days of payables ranged from 38.56 days to 78.12 days across the last eight quarters. A higher number of days of payables suggests that the company takes longer to settle its payables, potentially indicating favorable payment terms with suppliers. However, there was a substantial increase in Q4 2022, which could be a point of concern if it becomes a consistent trend.

Overall, Unitil Corp. should continue monitoring and analyzing its activity ratios to ensure optimal management of its working capital and improve overall operational efficiency.

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Long-term

Unitil Corp.'s long-term activity ratios provide insight into the efficiency with which the company utilizes its fixed assets and total assets to generate revenue.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio for Unitil Corp. has been relatively stable, averaging around 0.42 over the recent quarters.
- A fixed asset turnover ratio of 0.42 indicates that for each dollar invested in fixed assets, Unitil generates $0.42 in sales.
- The company's ability to generate revenue from its fixed assets has been consistent, with only slight fluctuations observed.

2. Total Asset Turnover:
- The total asset turnover ratio for Unitil Corp. has also shown consistency, hovering around 0.35 to 0.36 in the past quarters.
- This ratio indicates that Unitil generates $0.35 to $0.36 in revenue for every dollar of assets it has.
- Despite variations, the company has maintained a stable level of efficiency in utilizing its total assets to generate sales.

Overall, Unitil Corp. demonstrates a moderate level of efficiency in utilizing both its fixed assets and total assets to generate revenue, as indicated by the consistent ratios observed over the quarters. It is important for the company to continue monitoring and optimizing its asset utilization to ensure sustainable growth and profitability.