UNITIL Corporation (UTL)

Short-term

Turnover ratios

Inventory Turnover Ratio:

The inventory turnover ratio for UNITIL Corporation has remained relatively stable over the analyzed period, averaging around 25 times per year. The company efficiently manages its inventory turnover, which indicates effective inventory management and a good sales strategy.

Receivables Turnover Ratio:

The receivables turnover ratio reflects how well UNITIL collects its accounts receivable during the period. The ratio has fluctuated, but generally shows that the company collects receivables around 13-15 times a year. This suggests that UNITIL has been managing its credit policies reasonably well.

Payables Turnover Ratio:

The payables turnover ratio measures how many times a company pays its suppliers over a period. UNITIL's payables turnover ratio indicates that the company pays its suppliers around 7-10 times a year. This could imply that the company manages its payables efficiently and maintains good relationships with suppliers.

Working Capital Turnover Ratio:

The working capital turnover ratio helps assess how efficiently the company utilizes its working capital to generate revenues. UNITIL Corporation shows varying results for this ratio, with some periods having significant turnovers and others not having information available. Overall, the company may need to focus on improving its working capital turnover to optimize its operational efficiency in the future.

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Average number of days

Based on the provided data on UNITIL Corporation's activity ratios, we can analyze the following:

1. Days of Inventory on Hand (DOH):
- UNITIL's inventory turnover has been improving steadily over the periods, as the days of inventory on hand have decreased from 23.85 days on March 31, 2020, to 15.50 days on December 31, 2024.
- The company has been able to manage its inventory efficiently, decreasing the time it holds inventory before selling it, which indicates effective inventory management over time.

2. Days of Sales Outstanding (DSO):
- UNITIL has shown a consistent pattern of managing its accounts receivable well, as the days of sales outstanding have fluctuated but generally remained stable.
- The DSO metric has ranged from a low of 21.64 days on June 30, 2023, to a high of 32.81 days on March 31, 2021, indicating reasonable credit and collection policies in place.

3. Number of Days of Payables:
- UNITIL's payment cycle to its suppliers, as indicated by the days of payables, has shown some fluctuations.
- The company has managed to extend its payables period at times, as seen by the increase in days of payables from 34.50 days on September 30, 2022, to 54.26 days on December 31, 2024.
- However, it's important to note that managing payables effectively is a delicate balance between optimizing cash flow and maintaining good supplier relationships.

In conclusion, UNITIL Corporation has demonstrated effective management of its working capital components - inventory, accounts receivable, and accounts payable - over the periods analyzed, which reflects positively on the company's operational efficiency and financial health.

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Long-term

UNITIL Corporation's Fixed Asset Turnover ratio has shown some fluctuations over the years, ranging from as low as 0.68 to as high as 24.87. The sudden spike in the ratio to 24.87 in March 31, 2022, followed by a decrease in subsequent periods, may indicate a significant change in how efficiently the company is utilizing its fixed assets. However, the ratio's inconsistency in later periods raises some concerns about the reliability of the reported data, especially when it suddenly drops to as low as 10.17 in September 30, 2023.

On the other hand, the Total Asset Turnover ratio has been relatively stable, gradually increasing from 0.55 in December 31, 2020, to 0.73 in June 30, 2023, before experiencing a slight decline in the following periods. This ratio reflects how efficiently UNITIL is generating revenue from its total assets, showing a positive trend overall.

In summary, while the Total Asset Turnover ratio demonstrates a more consistent performance, the Fixed Asset Turnover ratio exhibits significant variations that may warrant further investigation into the company's fixed asset management and reporting practices.