Allegheny Technologies Incorporated (ATI)

ATI Inc's liquidity ratios provide insights into the company's ability to meet its short-term obligations. The current ratio, which measures the company's ability to cover its current liabilities with current assets, has been relatively stable over the past five years, ranging from 2.57 to 3.16. A current ratio above 1 indicates that ATI Inc has sufficient current assets to cover its current liabilities.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. ATI Inc's quick ratio has also been consistent, ranging from 1.33 to 1.64 over the past five years. This indicates that even after excluding inventory, the company has an adequate level of liquid assets to cover its short-term obligations.

The cash ratio, which is the most conservative liquidity ratio, measures the company's ability to cover its current liabilities with its cash and cash equivalents alone. ATI Inc's cash ratio has shown some fluctuation, ranging from 0.70 to 1.11 over the same period. A cash ratio above 1 indicates that the company can cover its current liabilities solely with cash, which suggests a strong liquidity position.

Overall, ATI Inc's liquidity ratios reflect a generally sound liquidity position, with the current, quick, and cash ratios all indicating that the company has sufficient liquid assets to meet its short-term obligations. However, it is essential for the company to continue monitoring these ratios to ensure that liquidity remains at a healthy level to support its ongoing operations and growth plans.

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Additional liquidity measure

The cash conversion cycle of ATI Inc has shown fluctuations over the past five years. In 2023, the cash conversion cycle stands at 132.91 days, slightly higher than the previous year's 130.22 days. This indicates that ATI Inc takes approximately 132.91 days to convert its investments in inventory and other resources into cash receipts from customers.

Comparing the current cycle to previous years, we observe variations in efficiency. In 2022, the company's cash conversion cycle decreased, showing improved efficiency in managing its working capital compared to 2021, where the cycle was considerably longer at 160.54 days. However, the cycle was shorter in 2020 at 138.21 days compared to 2023, demonstrating a slight decline in efficiency in the most recent year.

Notably, in 2019, the cash conversion cycle was relatively lower at 115.48 days, suggesting ATI Inc was more efficient in converting its investments into cash that year. Overall, fluctuations in the cash conversion cycle highlight changes in the company's operational efficiency and effectiveness in managing its working capital over the years.