Albemarle Corp (ALB)

Activity ratios

Short-term

Turnover ratios

	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
Inventory turnover	3.90	2.05	1.58	1.53	2.05	2.03	2.32	2.41	2.92	3.07	3.00	3.21	2.84	2.63	2.64	2.67	3.03	2.84	2.71	2.90
Receivables turnover	4.16	5.79	5.46	5.27	4.60	4.78	3.99	4.97	4.52	5.74	6.29	5.42	4.58	5.61	5.68	5.90	4.46	4.86	4.68	5.13
Payables turnover	—	—	—	2.77	2.77	1.99	2.58	2.89	3.88	4.19	4.11	4.47	4.42	4.67	4.30	3.98	4.06	4.32	3.95	4.54
Working capital turnover	5.81	3.10	3.05	2.78	2.99	3.09	2.76	15.55	27.89	6.80	2.77	3.05	7.74	5.28	3.87	3.63	4.40	6.41	5.37	4.77

When analyzing Albemarle Corp.'s activity ratios, we can see gradual fluctuations in efficiency over the quarters in 2023.

1. Inventory turnover: This ratio indicates the number of times a company sells and replaces its inventory during a period. Albemarle Corp.'s inventory turnover has been fluctuating, with a peak of 3.90 in Q4 2023, indicating that the company sold and replaced its inventory approximately 3.90 times during that quarter.

2. Receivables turnover: This ratio measures how efficiently a company collects cash from its customers. Albemarle Corp.'s receivables turnover has been relatively stable in 2023, with values ranging from 5.24 to 5.79. This suggests that the company is collecting its receivables efficiently.

3. Payables turnover: Payables turnover shows how well a company manages its accounts payable. Albemarle Corp.'s payables turnover has been fluctuating but generally upward, reaching 4.04 in Q4 2023. This increase indicates that the company is taking more time to pay its suppliers, which can be beneficial for cash flow management.

4. Working capital turnover: This ratio reflects how efficiently a company utilizes its working capital to generate sales. Albemarle Corp.'s working capital turnover has also been fluctuating but at a higher range, reaching 5.81 in Q4 2023. This suggests that the company is effectively using its working capital to drive sales.

Overall, while there are fluctuations in these activity ratios, Albemarle Corp. seems to be managing its inventory, receivables, payables, and working capital efficiently over the quarters in 2023. Monitoring these ratios can provide insights into the company's operational efficiency and financial health.

Average number of days

		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	93.56	177.74	230.92	238.37	178.48	179.45	157.60	151.46	125.11	119.04	121.67	113.63	128.32	139.00	138.00	136.64	120.38	128.52	134.67	126.05
Days of sales outstanding (DSO)	days	87.65	63.08	66.90	69.25	79.30	76.40	91.55	73.47	80.70	63.58	58.04	67.29	79.69	65.03	64.30	61.85	81.81	75.06	77.99	71.22
Number of days of payables	days	—	—	—	131.76	131.85	183.63	141.45	126.35	94.07	87.16	88.88	81.61	82.65	78.16	84.81	91.75	89.88	84.41	92.45	80.42

Albemarle Corp.'s activity ratios provide insights into the efficiency of the company's operations.

1. Days of Inventory on Hand (DOH): The trend in Albemarle's DOH shows fluctuation over the periods under review, ranging from 93.56 days to 238.37 days. A lower DOH is generally preferred as it indicates that the company is managing its inventory efficiently and quickly converting it into sales. The company should aim to reduce the number of days inventory is held to improve cash flow and minimize carrying costs.

2. Days of Sales Outstanding (DSO): Albemarle's DSO has also varied significantly, ranging from 63.08 days to 91.55 days. A lower DSO indicates that the company is collecting payments from its customers more quickly, which is beneficial for liquidity. Conversely, a higher DSO can signify potential issues with credit policies or collection efforts, leading to cash flow constraints.

3. Number of Days of Payables: Albemarle's days of payables show fluctuations as well, ranging from 90.39 days to 207.67 days. A higher number of days of payables suggests that the company is taking longer to pay its suppliers, potentially improving cash flow in the short term. However, excessively long payment terms may strain supplier relationships and affect the company's reputation.

In conclusion, Albemarle Corp. should aim to optimize its activity ratios by efficiently managing inventory levels, collecting payments from customers promptly, and balancing payables to maintain strong relationships with suppliers while ensuring healthy cash flow positions. Monitoring these ratios over time can help the company make informed decisions to enhance overall operational efficiency and financial performance.

Long-term

	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
Fixed asset turnover	1.02	1.19	1.23	1.19	1.05	0.87	0.70	0.60	0.56	0.59	0.59	0.60	0.58	0.62	0.66	0.70	0.73	1.00	1.01	1.07
Total asset turnover	0.53	0.52	0.51	0.50	0.47	0.40	0.35	0.32	0.30	0.31	0.30	0.31	0.30	0.32	0.33	0.36	0.36	0.43	0.42	0.43

Long-term activity ratios provide insights into how effectively a company is utilizing its fixed assets and total assets to generate revenue.

Albemarle Corp.'s fixed asset turnover has shown a fluctuating trend over the past year, with values ranging from 0.60 to 1.23. The ratio indicates that for every dollar of fixed assets, the company generated sales ranging from $0.60 to $1.23. Generally, a higher fixed asset turnover is preferable as it suggests that the company is efficiently utilizing its fixed assets to generate revenue. The increasing trend from Q1 2022 to Q2 2023 shows an improvement in the company's efficiency in using its fixed assets.

On the other hand, Albemarle Corp.'s total asset turnover has also exhibited variability over the same period, with values ranging from 0.32 to 0.53. This ratio signifies the company's ability to generate sales relative to its total assets. Similar to fixed asset turnover, a higher total asset turnover ratio is desirable as it indicates efficient use of all assets in generating revenue. The fluctuating trend in this ratio suggests inconsistency in how effectively the company is utilizing its total assets to generate sales.

In conclusion, while Albemarle Corp. has shown improvement in utilizing its fixed assets more efficiently over the past year, the company's overall efficiency in utilizing its total assets to generate revenue appears to be inconsistent. Further analysis and monitoring of these ratios are recommended to assess the company's long-term asset utilization and operational efficiency.