Century Aluminum Company (CENX)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.89 | 4.49 | 7.35 | 5.05 | 5.64 |
| Receivables turnover | 24.97 | 23.62 | 79.81 | 46.77 | 26.18 |
| Payables turnover | 11.18 | 8.58 | 17.51 | 11.52 | 15.47 |
| Working capital turnover | 6.55 | 517.95 | 21.42 | 58.72 | 7.44 |
Century Aluminum Company's inventory turnover ratio has shown some fluctuations over the years. In 2022, it reached its highest point at 7.35, indicating that the company was able to convert its inventory into sales more efficiently that year. However, there was a decrease in 2024 to 3.89, suggesting a potential inefficiency in managing inventory during that period.
The receivables turnover ratio for Century Aluminum Company has also varied significantly. The company saw a substantial increase in 2022 at 79.81, indicating a strong ability to collect outstanding receivables quickly. However, this ratio dropped in 2023 to 23.62, which could imply potential issues with collecting receivables efficiently during that year.
Regarding payables turnover, Century Aluminum Company experienced fluctuations as well. The ratio decreased in 2023 to 8.58, indicating a slower rate of paying its suppliers compared to previous years. While it improved in 2024 to 11.18, the company may still need to monitor and optimize its payables management to ensure effective cash flow management.
The working capital turnover ratio for Century Aluminum Company spiked significantly in 2023 to 517.95, implying a very high level of sales generated per unit of working capital invested. However, this could also indicate potential risks of overtrading or inadequate working capital levels. Overall, a comprehensive analysis of these activity ratios can provide valuable insights into Century Aluminum Company's operational efficiency and effectiveness in managing its resources.
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 | 93.94 | 81.37 | 49.69 | 72.32 | 64.72 |
| Days of sales outstanding (DSO) | days | 14.62 | 15.45 | 4.57 | 7.80 | 13.94 |
| Number of days of payables | days | 32.64 | 42.56 | 20.85 | 31.69 | 23.59 |
Century Aluminum Company's activity ratios provide insights into its efficiency in managing inventory, collecting receivables, and paying suppliers.
1. Days of Inventory on Hand (DOH):
- The DOH measures how many days it takes for the company to convert its inventory into sales.
- The trend shows an increase in DOH from 64.72 days in 2020 to 93.94 days in 2024, indicating that inventory turnover has slowed down over time.
- The increase in DOH may signal potential issues such as overstocking, slowing sales, or production inefficiencies.
2. Days of Sales Outstanding (DSO):
- DSO measures the average number of days it takes for the company to collect payment on its credit sales.
- The trend shows a decrease in DSO from 13.94 days in 2020 to 14.62 days in 2024, suggesting that the company has been more efficient in collecting receivables.
- A lower DSO indicates that Century Aluminum is collecting payments from customers faster, which is positive for cash flow and liquidity.
3. Number of Days of Payables:
- This ratio represents how long the company takes to pay its suppliers.
- The trend shows fluctuations in the number of days of payables, with an increase from 23.59 days in 2020 to 32.64 days in 2024.
- A longer payment period may provide Century Aluminum with more flexibility in managing cash flow but could strain supplier relationships if not managed effectively.
Overall, Century Aluminum Company's activity ratios indicate a need to closely monitor inventory management practices to improve efficiency and maintain healthy relationships with both customers and suppliers.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.27 | 2.11 | 7.69 | 4.66 | 1.82 |
| Total asset turnover | 1.15 | 1.15 | 3.89 | 2.65 | 1.15 |
Century Aluminum Company has shown a significant improvement in its fixed asset turnover ratio over the years, indicating a more efficient utilization of its fixed assets. The ratio increased from 1.82 in 2020 to 7.69 in 2022 before slightly decreasing to 2.27 in 2024. This trend suggests that the company has been able to generate more revenue per dollar invested in fixed assets, reflecting improved operational efficiency.
In terms of total asset turnover, Century Aluminum Company also experienced a notable increase in efficiency, with the ratio rising from 1.15 in 2020 to 3.89 in 2022, before stabilizing at 1.15 in 2023 and 2024. This indicates that the company has been successful in generating sales relative to its total assets, which is crucial for maximizing profitability and ensuring optimal asset utilization.
Overall, the long-term activity ratios of Century Aluminum Company demonstrate a positive trend in asset turnover, reflecting enhanced efficiency in asset management and operations over the specified period.