Howmet Aerospace Inc (HWM)

Short-term

Turnover ratios

Based on the provided data for Howmet Aerospace Inc's activity ratios, we can observe the following trends:

1. Inventory Turnover: The inventory turnover ratio measures how efficiently a company manages its inventory. Howmet Aerospace's inventory turnover has been gradually decreasing from 4.33 on March 31, 2020, to 2.86 on December 31, 2024. A decreasing trend in inventory turnover could indicate potential issues with sales or overstocking.

2. Receivables Turnover: Unfortunately, there is no data available for the receivables turnover ratio in the provided information. This ratio typically measures how efficiently a company collects payments from its customers.

3. Payables Turnover: Similar to receivables turnover, payables turnover data is not available. The payables turnover ratio would have provided insights into how quickly the company pays its suppliers.

4. Working Capital Turnover: The working capital turnover ratio indicates how efficiently a company is using its working capital to generate sales. Howmet Aerospace's working capital turnover has shown fluctuations over the years, ranging from a low of 2.93 on March 31, 2021, to a high of 5.70 on June 30, 2024. Overall, the trend has been somewhat volatile, suggesting varying levels of efficiency in utilizing working capital.

In conclusion, Howmet Aerospace's activity ratios reflect fluctuations and trends that may indicate areas of strength or concern in the company's operations. Further analysis and comparison with industry benchmarks would provide more insights into the company's performance in managing its inventory, working capital, and payment cycles.

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Average number of days

The Days of Inventory on Hand (DOH) for Howmet Aerospace Inc have fluctuated over the past few years. The company started with around 84 days of inventory on hand in March 2020, which decreased to 68.85 days by June 2020. However, the DOH then increased to over 150 days by June 2021 before gradually decreasing to around 127 days by December 2024.

The Days of Sales Outstanding (DSO) and Number of Days of Payables data for Howmet Aerospace Inc are not provided in the provided dataset, so we are unable to analyze the company's accounts receivable turnover and accounts payable turnover based on these ratios.

Overall, the trend in the Days of Inventory on Hand suggests that Howmet Aerospace Inc may have experienced challenges with managing its inventory efficiently, leading to periods of excess inventory levels. This can tie up working capital and increase holding costs, impacting the company's profitability and operational efficiency. Keeping a close eye on inventory management practices and working towards optimizing inventory levels could be beneficial in improving the company's financial performance.

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Long-term

The fixed asset turnover ratio measures Howmet Aerospace Inc's ability to generate sales from its investments in fixed assets. Over the observed periods, the fixed asset turnover ratio has shown a fluctuating trend ranging from 1.90 to 4.47. The ratio peaked at 4.47 in June 2020, indicating the company generated $4.47 in sales for every dollar invested in fixed assets. Following this peak, the ratio experienced a decline but has gradually increased since then. As of December 2023, the ratio stood at 2.56, illustrating a moderate efficiency in utilizing fixed assets to generate revenue.

On the other hand, the total asset turnover ratio reflects the company's ability to generate sales from its total assets. The ratio fluctuated between 0.44 and 0.71 during the observed periods. The ratio reached its lowest point in March 2021 at 0.44, implying that for every dollar of assets the company had, it generated only $0.44 in sales. Subsequently, the total asset turnover ratio showed an increasing trend, reaching 0.71 by December 2024, indicating an improvement in utilizing assets to generate revenue.

In summary, despite fluctuations, both the fixed asset turnover and total asset turnover ratios show an overall improving trend in the company's efficiency in utilizing assets to generate sales over the observed periods.