Alcoa Corp (AA)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.45 | 1.45 | 1.75 | 1.56 | 1.64 |
| Quick ratio | 0.34 | 0.32 | 0.45 | 0.57 | 0.59 |
| Cash ratio | 0.34 | 0.32 | 0.45 | 0.57 | 0.59 |
The current ratio for Alcoa Corp declined slightly from 1.64 in 2020 to 1.56 in 2021 before showing an improvement to 1.75 in 2022. However, it decreased to 1.45 in both 2023 and 2024. This indicates that the company may have faced some challenges in managing its short-term obligations relative to its current assets in the most recent years.
The quick ratio, a more stringent measure of liquidity, followed a similar trend, decreasing from 0.59 in 2020 to 0.57 in 2021 and further dropping to 0.45 in 2022. It then declined significantly to 0.32 in 2023 before a slight recovery to 0.34 in 2024. This indicates that Alcoa Corp might have struggled to meet its short-term obligations with its most liquid assets in the last few years.
The cash ratio, which is the strictest measure of liquidity, mirrored the trends of the quick ratio, showing a decline from 0.59 in 2020 to 0.57 in 2021 and further decreasing to 0.45 in 2022. It then dropped significantly to 0.32 in 2023 before improving slightly to 0.34 in 2024. This suggests that the company's ability to cover its current liabilities with only cash and cash equivalents also weakened over the years.
Overall, the liquidity ratios of Alcoa Corp indicate a mixed performance, with a general decline in liquidity from 2020 to 2024. It would be advisable for the company to closely monitor its liquidity position and take appropriate measures to ensure it can meet its short-term obligations effectively in the future.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 72.61 | 80.27 | 86.75 | 78.00 | 64.03 |
The cash conversion cycle for Alcoa Corp has shown a fluctuating trend over the past five years. Starting at 64.03 days on December 31, 2020, it increased to 78.00 days by the end of 2021. Subsequently, there was a further increase to 86.75 days by December 31, 2022, indicating a longer time taken to convert resources into cash.
However, there was a slight improvement by December 31, 2023, with the cycle reducing to 80.27 days. The most recent data point on December 31, 2024, showed a decrease to 72.61 days, suggesting a more efficient management of working capital during that period.
Overall, the fluctuating trend of the cash conversion cycle for Alcoa Corp indicates potential variations in the company's ability to efficiently manage its cash flow, inventory, and receivables over the years analyzed.