Alcoa Corp (AA)
Cash ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 944,000 | 1,363,000 | 1,814,000 | 1,607,000 | 879,000 |
| Short-term investments | US$ in thousands | 29,000 | -21,000 | 14,000 | 21,000 | 59,000 |
| Total current liabilities | US$ in thousands | 3,030,000 | 3,004,000 | 3,223,000 | 2,761,000 | 2,563,000 |
| Cash ratio | 0.32 | 0.45 | 0.57 | 0.59 | 0.37 |
December 31, 2023 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($944,000K
+ $29,000K)
÷ $3,030,000K
= 0.32
The cash ratio of Alcoa Corp has shown a declining trend over the past five years, decreasing from 0.48 in 2019 to 0.47 in 2023. This indicates that the company's ability to cover its short-term liabilities with its available cash and cash equivalents has slightly weakened over this period.
Although the cash ratio fluctuated between 0.64 and 0.48 from 2019 to 2023, it remained above 0.50 for the majority of the time, suggesting that Alcoa Corp has generally maintained a sufficient level of liquidity to meet its short-term obligations. However, the decreasing trend in the cash ratio may raise concerns about the company's liquidity position and its ability to quickly access funds to cover immediate financial needs in the future.
Overall, while the cash ratio indicates the company's ability to pay off its current liabilities using its cash holdings, other factors such as cash flow management and access to credit lines should also be considered to gain a comprehensive understanding of Alcoa Corp's liquidity position.
Peer comparison
Dec 31, 2023