American Airlines Group (AAL)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover	13.59	14.57	15.32	14.43	12.74
Receivables turnover	27.00	24.85	21.97	18.66	11.99
Payables turnover	14.60	14.86	16.24	14.61	17.19
Working capital turnover	—	—	—	—	—

American Airlines Group has shown improvement in its inventory turnover ratio over the years, with a steady increase from 12.74 in 2020 to 13.59 in 2024. This indicates that the company is managing its inventory more efficiently, as it is selling its inventory at a quicker pace.

The receivables turnover ratio has also seen a significant rise from 11.99 in 2020 to 27.00 in 2024, reflecting a stronger ability to collect outstanding payments from customers. This increase suggests that American Airlines Group is effectively managing its accounts receivable and converting credit sales into cash more rapidly.

In contrast, the payables turnover ratio has fluctuated slightly but remained relatively stable, with a slight decrease from 17.19 in 2020 to 14.60 in 2024. This indicates that the company is taking slightly longer to pay off its payables, which could potentially affect its relationships with suppliers.

The working capital turnover ratio is not provided for any of the years, so it is not possible to assess how efficiently American Airlines Group is utilizing its working capital to generate sales. Working capital turnover ratio is a measure of how effectively a company is generating sales from its working capital, so the absence of this data limits our ability to evaluate this aspect of the company's operations.

Average number of days

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	26.86	25.05	23.83	25.30	28.65
Days of sales outstanding (DSO)	days	13.52	14.69	16.61	19.56	30.45
Number of days of payables	days	24.99	24.56	22.47	24.98	21.23

American Airlines Group has shown improvement in its Days of Inventory on Hand (DOH) ratio over the years, decreasing from 28.65 days as of December 31, 2020, to 26.86 days as of December 31, 2024. This trend suggests that the company is managing its inventory levels more efficiently.

On the other hand, the Days of Sales Outstanding (DSO) ratio has seen a significant decline from 30.45 days on December 31, 2020, to 13.52 days on December 31, 2024. This indicates that American Airlines Group has been collecting its accounts receivable more quickly, potentially improving its cash flow and liquidity position.

The Number of Days of Payables ratio has remained relatively stable, ranging from 21.23 days as of December 31, 2020, to 24.99 days as of December 31, 2024. This suggests that the company's payment terms with its suppliers have not changed significantly over the years.

Overall, American Airlines Group's activity ratios indicate efficient inventory management, improved accounts receivable collection, and stable accounts payable practices. These trends are essential for evaluating the company's operational performance and financial health.

Long-term

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Fixed asset turnover	1.78	1.66	1.59	0.97	0.52
Total asset turnover	0.88	0.80	0.73	0.42	0.26

The Fixed Asset Turnover ratio for American Airlines Group has shown a significant improvement over the years, increasing from 0.52 in 2020 to 1.78 in 2024. This indicates that the company has been able to generate more revenue from its fixed assets in recent years, reflecting improved operational efficiency and better utilization of its long-term assets.

Similarly, the Total Asset Turnover ratio has also increased steadily from 0.26 in 2020 to 0.88 in 2024. This suggests that American Airlines Group has been more effective in generating sales in relation to its total assets, indicating better overall asset management efficiency and effective utilization of its resources to drive revenue growth.

Overall, the increasing trend in both Fixed Asset Turnover and Total Asset Turnover ratios for American Airlines Group signifies a positive performance in terms of utilizing its assets to generate revenue and reflects the company's efforts to improve operational efficiency and productivity over the years.