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.
