Alcoa Corp (AA)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 1.45 1.41 1.55 1.61 1.45 1.66 1.80 1.78 1.75 1.81 1.81 1.62 1.56 1.46 1.57 1.52 1.64 1.77 1.42 1.50
Quick ratio 0.34 0.38 0.45 0.45 0.33 0.37 0.42 0.45 0.45 0.55 0.58 0.45 0.56 0.89 1.04 0.79 0.58 0.76 0.43 0.37
Cash ratio 0.34 0.38 0.45 0.45 0.33 0.37 0.42 0.45 0.45 0.55 0.58 0.45 0.56 0.89 1.04 0.79 0.58 0.76 0.43 0.37

The current ratio of Alcoa Corp has shown fluctuations over the period from March 31, 2020, to December 31, 2024, ranging from a low of 1.41 to a high of 1.81. This ratio indicates that the company had sufficient current assets to cover its current liabilities, with the highest level of 1.81 observed on June 30, 2022. Generally, a current ratio above 1 is considered healthy, as it suggests that the company can meet its short-term obligations.

In terms of the quick ratio, Alcoa Corp's liquidity position also varied during the same period, with the ratio ranging from 0.33 to 1.04. The quick ratio is a more stringent measure of liquidity as it excludes inventory from current assets. The company's ability to meet its short-term liabilities without relying on selling inventory was strongest on June 30, 2021.

The cash ratio, which is the most conservative measure of liquidity, remained relatively stable for Alcoa Corp during the period, ranging from 0.33 to 1.04. The company's ability to cover its current liabilities with its cash and cash equivalents improved slightly in some periods but remained at a reasonable level overall.

Overall, the liquidity ratios of Alcoa Corp indicate that the company generally maintained a solid liquidity position, with the ability to meet its short-term obligations using a combination of current assets, liquid assets, and cash reserves.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 72.61 78.43 73.33 76.18 80.27 80.06 86.03 83.77 86.75 87.61 96.65 100.72 78.00 71.05 66.74 62.80 64.03 63.44 63.75 65.71

The cash conversion cycle for Alcoa Corp has shown fluctuations over the provided period from March 31, 2020, to December 31, 2024.

The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle is generally desirable as it indicates that the company is efficiently managing its working capital.

In the case of Alcoa Corp, the cash conversion cycle initially decreased from 65.71 days as of March 31, 2020, to 62.80 days as of March 31, 2021, indicating an improvement in working capital management efficiency. However, there was an uptrend observed in the subsequent quarters, with the cycle increasing to 100.72 days by March 31, 2022.

The company managed to reduce the cash conversion cycle to 72.61 days by December 31, 2024, which was lower than the peak observed in March 2022. This reduction in the cycle can suggest that Alcoa Corp improved its ability to generate cash from its operations more effectively by managing its inventories, payables, and receivables efficiently.

Overall, monitoring the cash conversion cycle is crucial for evaluating the company's operational efficiency and liquidity position. Alcoa Corp may benefit from further optimizing its working capital management practices to maintain a sustainable and healthy cash conversion cycle in the future.