As you close out 2015, take a look at the following key electric co-op performance indicators in Kentucky. Dean Dorton analyzed 11 of the larger electric co-op financial statements as provided to the Public Service Commission.

The industry looks stable with equity as a percentage of total assets climbing from 37% to 43% and an increase in current ratio from 1.18 to 1.25. Accounts receivable and accounts payable continue to turnover about every 12th day. Operating margin dipped from 6% to 5% and the group continues to reinvest in itself at the rate of 8% of revenue.

The industry is highly leveraged to fund its capital with debt exceeding its equity. The purchase of energy sits at 74% of revenue and represents one of the main risks going forward as highlighted in Dean Dorton’s top 10 electric co-op list for 2016.

2014

2013

Debt to equity

1.39

1.46

Equity to total assets

43%

37%

Current ratio

1.25

1.18

Accounts payable turnover

12.65

11.82

Accounts receivable turnover

12.59

12.82

Operating margin

5%

6%

Cost of purchase %

74%

74%

Plant additions %

8%

8%

 

For more information, contact Bill Kohm at bkohm@deandorton.com or 859-425-7625.

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