Xcel Energy Inc (XEL)

Short-term

Turnover ratios

The activity ratios of Xcel Energy, Inc. provide insights into how efficiently the company is managing its assets and liabilities in generating sales revenue.

1. Inventory turnover: Xcel Energy's inventory turnover has been relatively stable over the past eight quarters, ranging from 7.48 to 12.29. This indicates that the company is efficiently managing its inventory levels and quickly converting inventory into sales. A higher turnover ratio suggests better inventory management and less risk of obsolete inventory.

2. Receivables turnover: The receivables turnover ratio for Xcel Energy has also been consistent, with values between 6.18 and 8.23. This demonstrates that the company is promptly collecting outstanding receivables from its customers, which is essential for maintaining healthy cash flows. A higher turnover ratio implies effective credit management and timely collection practices.

3. Payables turnover: Xcel Energy's payables turnover ratio has shown some fluctuations but generally remained between 3.47 and 5.33 over the analyzed period. A higher payables turnover ratio indicates that the company is efficiently managing its accounts payable and paying its vendors in a timely manner. This can positively impact relationships with suppliers and support liquidity management.

4. Working capital turnover: The lack of data for working capital turnover in the most recent quarters makes it challenging to assess the efficiency of Xcel Energy's utilization of working capital to generate sales revenue. However, in Q3 2022, the company had an exceptionally high working capital turnover of 78.14, suggesting that Xcel Energy effectively leveraged its working capital to support its operations and drive revenue growth during that period.

Overall, the activity ratios of Xcel Energy, Inc. indicate that the company is effectively managing its assets and liabilities to support operational efficiency and generate sales revenue. Consistent turnover ratios across inventory, receivables, and payables suggest a well-balanced approach to managing working capital and conducting business activities.

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Average number of days

Activity ratios provide insights into how efficiently a company manages its assets and liabilities. Let's analyze the activity ratios of Xcel Energy, Inc. based on the provided data:

1. Days of Inventory on Hand (DOH) measures how long it takes for inventory to be sold or used. Xcel Energy's DOH has been decreasing over the quarters, indicating a more efficient management of inventory levels. A decreasing trend implies that the company is selling off its inventory faster, which can help improve cash flows and reduce holding costs.

2. Days of Sales Outstanding (DSO) measures how long it takes for the company to collect payment from its customers. Xcel Energy's DSO fluctuates but has generally been on a decreasing trend, indicating a quicker collection of receivables. This trend suggests that the company is effectively managing its accounts receivable, which can improve liquidity and cash flow.

3. Number of Days of Payables measures how long it takes for Xcel Energy to pay its suppliers. The data shows fluctuating figures, but there is an increasing trend in the number of days of payables. A longer payment period may indicate that the company is managing its cash flow by delaying payments, allowing for more flexibility in managing working capital.

In conclusion, Xcel Energy, Inc. has shown improvements in its inventory management and accounts receivable collection over the quarters. The lengthening payment period to suppliers suggests a strategic approach to managing working capital and cash flow. These trends indicate that Xcel Energy is working towards improving its operational efficiency and financial performance.

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Long-term

Xcel Energy, Inc.'s long-term asset turnover ratios, which include fixed asset turnover and total asset turnover, indicate the efficiency with which the company utilizes its assets to generate revenue.

- Fixed Asset Turnover: This ratio measures how effectively the company generates revenue from its investment in fixed assets such as property, plant, and equipment. Xcel Energy's fixed asset turnover has been relatively stable over the past eight quarters, ranging from 0.28 to 0.32. A lower ratio suggests that the company may not be efficiently utilizing its fixed assets to generate sales.

- Total Asset Turnover: This ratio assesses the company's ability to generate revenue from all its assets, including both fixed and current assets. Xcel Energy's total asset turnover also shows consistency within the range of 0.22 to 0.26 over the same period. A lower total asset turnover ratio may indicate that Xcel Energy is not efficiently converting its total assets into sales.

Overall, the trend in both fixed asset turnover and total asset turnover ratios for Xcel Energy, Inc. suggests that the company may need to focus on improving its asset utilization efficiency to enhance its revenue generation capabilities in the long term.