Essential Utilities Inc (WTRG)
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 | 3.26 | 0.29 | 0.31 | 0.28 | 0.11 | 0.17 | 0.23 | 0.42 | 0.18 | 0.45 | 0.73 | 1.21 | 0.26 | 4.07 | 4.82 | 6.14 | 10.95 | 12.23 | 14.55 | 16.90 |
| Receivables turnover | 8.36 | 10.92 | 10.21 | 6.99 | 6.07 | 10.46 | 9.18 | 6.94 | 7.20 | 10.58 | 9.34 | 7.07 | 5.35 | 6.40 | 5.19 | 3.58 | 8.27 | 7.43 | 7.69 | 8.76 |
| Payables turnover | 1.66 | 0.19 | 0.19 | 0.17 | 0.09 | 0.18 | 0.15 | 0.15 | 0.10 | 0.31 | 0.35 | 0.35 | 0.09 | 1.72 | 1.94 | 1.80 | 2.69 | 3.62 | 4.13 | 4.97 |
| Working capital turnover | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 0.53 | 0.48 | 0.50 | — |
Essential Utilities Inc's activity ratios provide insights into its efficiency in managing its resources.
1. Inventory turnover: The company's inventory turnover has generally improved over the quarters, indicating that Essential Utilities Inc is selling its inventory more quickly. This suggests efficient inventory management, reducing the risk of carrying excess inventory.
2. Receivables turnover: The receivables turnover ratio reflects how effectively Essential Utilities Inc collects outstanding payments from its customers. The ratios fluctuate but generally show a good trend, with higher turnover indicating quicker collection of receivables. This implies effective credit and collection policies.
3. Payables turnover: Essential Utilities Inc's payables turnover has varied but generally indicates that the company is taking longer to pay its trade suppliers. This may indicate favorable payment terms and could help with cash flow management.
4. Working capital turnover: The data provided do not include the working capital turnover ratio. This ratio would have offered insights into how well the company is utilizing its working capital to generate revenue. Additional information is needed to analyze this aspect of Essential Utilities Inc's performance.
Overall, Essential Utilities Inc's activity ratios reflect a positive trend towards improved efficiency in managing inventory, collecting receivables, and possibly negotiating favorable payment terms with suppliers. A comprehensive analysis of all activity ratios provides a holistic view of the company's operational 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 | 111.99 | 1,257.36 | 1,175.64 | 1,286.70 | 3,350.64 | 2,195.01 | 1,566.06 | 863.31 | 2,043.51 | 814.68 | 498.33 | 301.59 | 1,380.15 | 89.59 | 75.73 | 59.48 | 33.33 | 29.84 | 25.09 | 21.60 |
| Days of sales outstanding (DSO) | days | 43.67 | 33.44 | 35.77 | 52.22 | 60.11 | 34.88 | 39.75 | 52.56 | 50.71 | 34.50 | 39.08 | 51.60 | 68.20 | 57.02 | 70.30 | 101.89 | 44.15 | 49.11 | 47.45 | 41.65 |
| Number of days of payables | days | 219.86 | 1,893.51 | 1,938.18 | 2,089.19 | 4,006.70 | 2,079.24 | 2,363.58 | 2,360.80 | 3,598.56 | 1,172.78 | 1,036.37 | 1,053.09 | 4,194.46 | 212.76 | 187.67 | 202.75 | 135.85 | 100.88 | 88.48 | 73.43 |
Essential Utilities Inc's activity ratios provide insight into its operational efficiency in managing inventory, collecting receivables, and paying suppliers.
Days of inventory on hand (DOH) has shown fluctuations over the last eight quarters, ranging from a low of 49.46 days in Q1 2022 to a high of 170.20 days in Q3 2022. The trend indicates that inventory management has been inconsistent, possibly impacted by changes in demand, supply chain disruptions, or production inefficiencies.
Days of sales outstanding (DSO) reflects the average number of days it takes for the company to collect on its sales. The trend has varied significantly, with Q4 2023 showing the highest DSO of 43.67 days, while Q3 2022 had the lowest DSO of 34.88 days. Lower DSO values suggest a more efficient collection process and better credit control.
Number of days of payables highlights how long Essential Utilities takes to pay its suppliers. The trend has also been erratic, with Q4 2023 showing the longest number of days at 229.16 days, indicating a potential strain on liquidity or unfavorable credit terms negotiated with suppliers.
Overall, Essential Utilities Inc's activity ratios reveal areas for improvement in managing inventory levels, receivables collection, and payables turnover to enhance operational efficiency and working capital management. Consistent monitoring of these ratios can help the company optimize its operations and financial performance.
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 | 0.17 | 0.19 | 0.20 | 0.20 | 0.21 | 0.19 | 0.19 | 0.19 | 0.18 | 0.18 | 0.19 | 0.19 | 0.15 | 0.13 | 0.12 | 0.11 | 0.14 | 0.14 | 0.14 | 0.14 |
| Total asset turnover | 0.12 | 0.14 | 0.14 | 0.15 | 0.15 | 0.14 | 0.14 | 0.13 | 0.13 | 0.13 | 0.13 | 0.13 | 0.11 | 0.09 | 0.09 | 0.07 | 0.10 | 0.09 | 0.09 | 0.12 |
Essential Utilities Inc's long-term activity ratios indicate the efficiency with which the company is utilizing its assets to generate sales. The fixed asset turnover ratio has been relatively stable over the past eight quarters, ranging from 0.17 to 0.21. This ratio measures how efficiently the company is using its fixed assets to generate revenue, with lower values suggesting that the company may be underutilizing its fixed assets.
On the other hand, the total asset turnover ratio, indicating how efficiently the company is using all its assets to generate sales, has also been relatively consistent, ranging from 0.12 to 0.15 over the same period. This ratio gives a broader view of asset utilization compared to the fixed asset turnover ratio.
Overall, both ratios suggest that Essential Utilities Inc may not be fully optimizing the use of its assets to generate sales. Further analysis and comparison with industry benchmarks may provide additional insights into the company's asset utilization efficiency and potential areas for improvement.