Alaska Air Group Inc (ALK)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 68.10 | 77.46 | 86.79 | 87.56 | 88.97 |
| Receivables turnover | 27.22 | 32.59 | 11.31 | 7.43 | 27.19 |
| Payables turnover | 38.16 | 36.45 | 26.90 | 46.21 | 43.88 |
| Working capital turnover | — | — | — | — | — |
Inventory turnover for Alaska Air Group Inc. has consistently been reported as 0.00 in the past five years, indicating that the company is managing its inventory levels effectively or operates in an industry where inventory turnover ratios are typically low.
The receivables turnover ratio has varied over the years, with a significant increase in 2022 to 32.59 from 11.31 in 2021, suggesting a more efficient collection of receivables in 2022. This ratio declined to 7.43 in 2020 but then increased to 27.19 in 2019, indicating fluctuations in the company's ability to collect its outstanding receivables promptly.
On the other hand, payables turnover has consistently been reported as 0.00 over the period, which could imply either quick payment of payables or significant delays in settling liabilities.
Unfortunately, there is no data available for the working capital turnover for analysis. This ratio could have provided insights into how effectively the company is utilizing its working capital to generate revenue.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 5.36 | 4.71 | 4.21 | 4.17 | 4.10 |
| Days of sales outstanding (DSO) | days | 13.41 | 11.20 | 32.27 | 49.13 | 13.43 |
| Number of days of payables | days | 9.56 | 10.01 | 13.57 | 7.90 | 8.32 |
Alaska Air Group Inc.'s Days of Sales Outstanding (DSO) has fluctuated over the past five years. In 2023, the DSO decreased to 13.41 days from 11.20 days in 2022, indicating a more efficient collection of receivables from customers. This improvement suggests that the company has been able to convert its accounts receivable into cash more quickly compared to the previous year.
In 2021, the DSO was significantly higher at 32.27 days, which might have been a cause for concern, as it indicates a longer period for collecting revenue from customers. However, there was a marked improvement in 2022.
Looking back at 2020 and 2019, the DSO was relatively stable at 49.13 days and 13.43 days, respectively. The lower DSO in 2019 is a positive sign of efficient accounts receivable management.
It would be beneficial for Alaska Air Group Inc. to continue focusing on maintaining a lower DSO to ensure timely collection of receivables and improve its cash conversion cycle.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 1.24 | 1.33 | 1.01 | 0.57 | 1.27 |
| Total asset turnover | 0.71 | 0.68 | 0.44 | 0.25 | 0.68 |
Alaska Air Group Inc.'s long-term activity ratios provide insights into its efficiency in utilizing its fixed and total assets to generate revenue over the past five years. The fixed asset turnover ratio has shown fluctuations, ranging from 0.57 to 1.33, indicating the variability in the company's ability to generate sales from its fixed assets. The highest value in 2022 suggests that the company effectively utilized its fixed assets to generate revenue compared to the other years.
On the other hand, the total asset turnover ratio has also displayed fluctuations, with values ranging from 0.25 to 0.71. This ratio indicates the company's overall efficiency in generating sales from its total assets, including both fixed and current assets. The significant increase in 2023 compared to 2022 suggests an improvement in the company's ability to generate revenue relative to its total asset base.
Overall, while the fixed asset turnover ratio has shown some volatility, the total asset turnover ratio has exhibited an increasing trend, implying that Alaska Air Group Inc. has been enhancing its efficiency in utilizing both fixed and total assets to drive revenue generation over the past five years. It is important for the company to continue monitoring and improving these ratios to ensure optimal asset utilization and sustainable growth in the long term.