What are the main aspects of the story told by electric utility ratios?
The main aspects of the story from electric utility ratios include the operational aspect. Operational ratios can show how well the company is running its day - to - day activities. For example, the outage duration ratio can tell how often and for how long there are power outages in the area served by the utility, which reflects on its maintenance and management. Another aspect is the investment aspect. Ratios like the price - to - earnings ratio can give an idea to investors about the value of the company's stock. If the ratio is high compared to industry peers, it might mean the market has high expectations for the company's future earnings. Also, there is the regulatory aspect. Some ratios can show how compliant the company is with regulatory requirements, which is important as electric utilities are often highly regulated.
The story told by electric utility ratios has several main aspects. Firstly, it's about the growth potential. Ratios such as the revenue growth rate can indicate whether the company is expanding or shrinking in terms of its sales. If the revenue growth rate is positive and high, it might be a sign of a growing market share or new business opportunities. Secondly, it's about cost management. The cost - to - revenue ratio can tell us how much of the revenue is being eaten up by costs. If this ratio is high, the company may need to look for ways to cut costs. Finally, it's about the company's ability to meet its obligations. The interest coverage ratio, for example, shows if the company can easily pay the interest on its debt, which is crucial for its long - term survival.
One main aspect is the financial stability. Ratios like the debt ratio can show how much debt the company has relative to its assets. A high debt ratio might mean the company is more vulnerable in tough economic times. Another aspect is efficiency. The efficiency ratios such as the energy efficiency ratio (if applicable) can tell if the company is good at converting inputs (like fuel) into electricity output efficiently. And then there's the profitability aspect. Profitability ratios like the net profit margin can show how much of each dollar of revenue is actually profit for the company.