Alpha Metallurgical Resources Inc (AMR)

Short-term

Turnover ratios

Alpha Metallurgical Resources Inc's activity ratios provide insights into the efficiency of its operations and management of working capital.

The Inventory turnover ratio has been consistent over the past eight quarters, ranging between 8.23 and 11.40. This indicates that Alpha Metallurgical Resources is effectively managing its inventory levels by quickly converting inventory into sales, which is generally positive for maintaining cash flow and avoiding excess inventory costs.

The Receivables turnover ratio shows a fluctuating trend, with a range of 4.63 to 10.07. A higher ratio suggests that the company is efficient in collecting payments from customers, while a lower ratio may indicate potential issues with credit policies or collection practices. It is essential to monitor this ratio closely to ensure timely collection of receivables.

The Payables turnover ratio has been relatively stable, varying between 17.25 and 21.99. A higher ratio indicates a faster turnover of payables, which could suggest favorable payment terms negotiated with suppliers. However, excessively high turnover may also indicate challenges in managing supplier relationships and potential liquidity issues.

The Working capital turnover ratio reflects how efficiently the company utilizes its working capital to generate revenue. Alpha Metallurgical Resources' ratio has been relatively consistent, ranging between 4.42 and 5.76 over the past quarters. A higher ratio signifies better utilization of working capital, indicating efficient operations and potentially higher profitability.

Overall, Alpha Metallurgical Resources Inc's activity ratios show operational efficiency in managing inventory levels and working capital, with room for improvement in receivables turnover. Monitoring these ratios consistently can help the company identify areas for optimization and enhance financial performance.

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Average number of days

Alpha Metallurgical Resources Inc's activity ratios provide insight into the efficiency of the company's operations.

1. Days of Inventory on Hand (DOH):
- The trend of DOH is increasing over the quarters, indicating that inventory is staying on hand for a longer period before being sold.
- Higher DOH could imply slower inventory turnover, tying up capital and potentially signaling overstocking or slowing sales.

2. Days of Sales Outstanding (DSO):
- DSO has been fluctuating over the quarters, with a general trend of increase recently.
- A higher DSO suggests that the company is taking longer to collect payments from customers, impacting cash flow and liquidity.

3. Number of Days of Payables:
- The days of payables have shown some variability but have generally remained stable over the quarters.
- A higher number of days of payables could indicate that the company is taking longer to pay its suppliers, which may have positive implications for cash flow management.

In summary, Alpha Metallurgical Resources Inc should focus on managing its inventory levels to improve inventory turnover, work towards reducing DSO to enhance cash flow, and carefully balance its payables to optimize working capital efficiency.

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Long-term

Alpha Metallurgical Resources Inc's long-term activity ratios provide insight into the company's efficiency in utilizing its fixed assets and total assets to generate revenue.

The fixed asset turnover ratio has shown a downward trend over the past year, from 4.59 in Q4 2022 to 3.34 in Q4 2023. This indicates that the company generated $3.34 in revenue for every dollar invested in fixed assets in Q4 2023. While the ratio has fluctuated, the decreasing trend suggests a potential inefficiency in utilizing fixed assets to generate revenue. However, the ratio remains relatively high, indicating that the company is still efficient in generating revenue from its fixed assets.

On the other hand, the total asset turnover ratio has also experienced fluctuations but has generally remained around the same level over the past year. In Q4 2023, the total asset turnover ratio was 1.44, meaning that the company generated $1.44 in revenue for every dollar invested in total assets. This indicates that Alpha Metallurgical Resources Inc is efficient in generating revenue from its total assets, although there may be room for improvement.

Overall, while the company appears to be effectively utilizing its total assets to generate revenue, there may be a need to address the declining trend in fixed asset turnover to ensure optimal efficiency in the long term. Management should further analyze the utilization of fixed assets and implement strategies to improve the efficiency of fixed asset turnover.