Alcoa Corp (AA)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.03 | 4.55 | 4.21 | 4.68 | 5.70 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 7.83 | 7.67 | 5.54 | 6.74 | 5.28 |
Based on the provided data for Alcoa Corp's activity ratios, we can analyze the following:
1. Inventory Turnover:
- The inventory turnover ratio decreased from 5.70 in 2020 to 4.68 in 2021, indicating that the company took longer to sell its inventory in 2021 compared to 2020.
- The ratio further decreased to 4.21 in 2022, slightly increased to 4.55 in 2023, and then increased significantly to 5.03 in 2024. Overall, there was some fluctuation in inventory turnover over the years.
2. Receivables Turnover:
- There is no data available for receivables turnover for all years, indicating that the company did not provide information on how efficiently it collects its accounts receivable.
3. Payables Turnover:
- Similar to receivables turnover, there is no data available for payables turnover for any year, suggesting that information on how quickly the company pays its suppliers is not disclosed.
4. Working Capital Turnover:
- The working capital turnover ratio increased from 5.28 in 2020 to 6.74 in 2021, which indicates that the company generated more revenue per dollar of working capital in 2021 compared to 2020.
- The ratio then decreased to 5.54 in 2022, before showing a notable improvement to 7.67 in 2023 and further increasing to 7.83 in 2024. This suggests that Alcoa Corp efficiently used its working capital to generate sales revenue over the years, with a strong performance in 2023 and 2024.
Overall, the inventory turnover fluctuated, while there was no information available on receivables and payables turnover. However, the working capital turnover improved over the years, indicating the company's effectiveness in utilizing its working capital to drive sales growth.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 72.61 | 80.27 | 86.75 | 78.00 | 64.03 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Based on the provided data, we can analyze Alcoa Corp's activity ratios as follows:
1. Days of Inventory on Hand (DOH):
- December 31, 2020: 64.03 days
- December 31, 2021: 78.00 days
- December 31, 2022: 86.75 days
- December 31, 2023: 80.27 days
- December 31, 2024: 72.61 days
The Days of Inventory on Hand measures how many days, on average, the inventory is held before being sold. Alcoa Corp's DOH has increased over the years, indicating a longer period of inventory storage which may tie up company funds or indicate potential inventory management inefficiencies.
2. Days of Sales Outstanding (DSO):
- December 31, 2020: Not provided
- December 31, 2021: Not provided
- December 31, 2022: Not provided
- December 31, 2023: Not provided
- December 31, 2024: Not provided
DSO reflects the number of days it takes for the company to collect revenue after a sale. As data for DSO is not available, it's not possible to assess Alcoa Corp's efficiency in collecting receivables.
3. Number of Days of Payables:
- December 31, 2020: Not provided
- December 31, 2021: Not provided
- December 31, 2022: Not provided
- December 31, 2023: Not provided
- December 31, 2024: Not provided
This ratio indicates how long a company takes to pay its suppliers. Lack of data for the number of days of payables makes it challenging to analyze Alcoa Corp's payment practices and relationships with suppliers.
In conclusion, the increasing trend in Days of Inventory on Hand raises concerns about Alcoa Corp's inventory management efficiency. However, without data on Days of Sales Outstanding and Number of Days of Payables, a comprehensive assessment of the company's overall activity ratios is limited.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 1.92 | 1.83 | 1.29 |
| Total asset turnover | 0.85 | 0.75 | 0.84 | 0.81 | 0.62 |
To analyze Alcoa Corp's long-term activity ratios, we will examine the fixed asset turnover and total asset turnover ratios over the years provided.
1. Fixed Asset Turnover Ratio:
- The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate sales.
- In 2020, the fixed asset turnover ratio was 1.29, indicating that for every dollar invested in fixed assets, Alcoa generated $1.29 in sales.
- By 2022, the ratio improved significantly to 1.92, suggesting an increase in efficiency in utilizing fixed assets to drive revenue.
- However, data for 2023 and 2024 are not available, limiting the ability to assess the trend in the later years.
2. Total Asset Turnover Ratio:
- The total asset turnover ratio reflects how effectively a company utilizes all its assets to generate revenue.
- In 2020, the total asset turnover ratio stood at 0.62, indicating that Alcoa generated $0.62 in sales for every dollar of assets it owned.
- The ratio improved gradually over the next few years, reaching 0.85 by 2024. This suggests an enhancement in the company's ability to generate sales relative to its total asset base.
Overall, the improvement in both fixed asset turnover and total asset turnover ratios from 2020 to 2024 indicates enhanced efficiency in asset utilization at Alcoa Corp. However, the lack of data for 2023 and 2024 in the fixed asset turnover ratio limits a comprehensive analysis of the company's long-term asset management efficiency.