Alcoa Corp (AA)
Working capital turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 10,494,000 | 10,518,000 | 10,798,000 | 11,717,000 | 12,326,000 | 12,863,000 | 13,111,000 | 12,351,000 | 11,954,000 | 11,167,000 | 10,433,000 | 9,693,000 | 9,175,000 | 9,219,000 | 9,428,000 | 9,990,000 | 10,327,000 | 11,235,000 | 12,076,000 | 12,977,000 |
| Total current assets | US$ in thousands | 4,405,000 | 4,365,000 | 4,670,000 | 4,946,000 | 5,250,000 | 5,350,000 | 5,863,000 | 5,598,000 | 5,026,000 | 4,285,000 | 4,201,000 | 4,891,000 | 4,520,000 | 4,053,000 | 3,179,000 | 3,333,000 | 3,530,000 | 3,643,000 | 3,818,000 | 4,114,000 |
| Total current liabilities | US$ in thousands | 3,030,000 | 2,624,000 | 2,596,000 | 2,785,000 | 3,004,000 | 2,954,000 | 3,236,000 | 3,466,000 | 3,223,000 | 2,929,000 | 2,671,000 | 3,221,000 | 2,761,000 | 2,303,000 | 2,241,000 | 2,223,000 | 2,563,000 | 2,455,000 | 2,531,000 | 2,803,000 |
| Working capital turnover | 7.63 | 6.04 | 5.21 | 5.42 | 5.49 | 5.37 | 4.99 | 5.79 | 6.63 | 8.24 | 6.82 | 5.80 | 5.22 | 5.27 | 10.05 | 9.00 | 10.68 | 9.46 | 9.38 | 9.90 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $10,494,000K ÷ ($4,405,000K – $3,030,000K)
= 7.63
The working capital turnover ratio measures how effectively a company utilizes its working capital to generate sales revenue. A higher ratio indicates efficient management of working capital, while a lower ratio may suggest inefficiency.
Based on the data provided for Alcoa Corp, we observe fluctuations in the working capital turnover ratio over the past eight quarters. In Q4 2023, the working capital turnover ratio was 7.67, reflecting a significant improvement from the previous quarter. This suggests that Alcoa Corp was able to generate $7.67 in revenue for every dollar of working capital invested, indicating efficient utilization of its working capital.
However, it is important to note that although the Q4 2023 ratio is high, it is essential to analyze trends over multiple periods to gain a more comprehensive understanding of the company's efficiency in managing working capital.
Looking at the trend over the past eight quarters, we notice fluctuations in the working capital turnover ratio, ranging from 5.10 to 7.67. The ratio peaked in Q4 2023 at 7.67, indicating a significant improvement in working capital efficiency compared to the previous quarters. This improvement may be attributed to better management of inventory, receivables, and payables, resulting in a higher turnover of working capital.
Overall, Alcoa Corp's working capital turnover has shown variability, with some quarters performing better than others. It is essential for investors and analysts to closely monitor this ratio over time to assess the company's operational efficiency and financial health.
Peer comparison
Dec 31, 2023