Alcoa Corp (AA)
Cash conversion cycle
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 77.21 | 76.94 | 82.83 | 80.73 | 83.61 | 93.02 | 102.75 | 107.51 | 83.11 | 72.99 | 68.64 | 64.72 | 64.57 | 54.33 | 54.40 | 72.36 | 104.80 | 215.50 | 796.24 | 633.21 |
| Days of sales outstanding (DSO) | days | 28.10 | 27.62 | 27.24 | 26.54 | 26.92 | 24.63 | 28.45 | 31.03 | 26.99 | 28.14 | 26.03 | 25.49 | 22.12 | 24.19 | 19.63 | 24.30 | 23.33 | 26.77 | 26.81 | 26.50 |
| Number of days of payables | days | 61.33 | 51.72 | 51.46 | 50.19 | 60.53 | 61.63 | 70.43 | 70.88 | 71.13 | 63.56 | 61.77 | 58.64 | 64.80 | 52.85 | 48.04 | 61.18 | 94.60 | 185.31 | 686.29 | 529.02 |
| Cash conversion cycle | days | 43.99 | 52.85 | 58.62 | 57.08 | 50.00 | 56.03 | 60.77 | 67.65 | 38.97 | 37.58 | 32.91 | 31.57 | 21.89 | 25.67 | 25.99 | 35.47 | 33.53 | 56.96 | 136.76 | 130.68 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 77.21 + 28.10 – 61.33
= 43.99
The cash conversion cycle for Alcoa Corp has shown fluctuating trends over the past eight quarters. The company's cash conversion cycle ranged from a low of 44.47 days in Q4 2023 to a high of 64.79 days in Q1 2022. Overall, a downward trend can be observed from Q1 2022 to Q4 2023, indicating an improvement in the company's efficiency in managing its cash, inventory, and receivables.
A lower cash conversion cycle is generally preferred as it signifies that the company is able to convert its investments in inventory back into cash more quickly. Alcoa Corp's recent improvement in its cash conversion cycle indicates enhanced operational efficiency and effective management of working capital, which could potentially lead to improved cash flow and profitability in the future. However, fluctuations in the cash conversion cycle should be monitored closely to ensure sustainable financial performance and liquidity management.
Peer comparison
Dec 31, 2023