Howmet Aerospace Inc (HWM)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Current ratio 2.17 2.24 1.53 1.97 1.86 2.14 2.22 2.18 2.12 2.06 2.15 2.22 2.18 2.33 2.28 1.98 2.21 2.28 2.23 1.69
Quick ratio 0.36 0.31 0.32 0.31 0.34 0.29 0.38 0.38 0.53 0.33 0.41 0.41 0.57 0.60 0.58 0.74 0.97 0.87 0.77 0.63
Cash ratio 0.36 0.31 0.32 0.31 0.34 0.29 0.38 0.38 0.53 0.33 0.41 0.41 0.57 0.60 0.58 0.74 0.97 0.87 0.77 0.63

The liquidity ratios of Howmet Aerospace Inc indicate a generally stable liquidity position over the reviewed periods. The current ratio, which measures the company's ability to cover short-term liabilities with current assets, has shown fluctuations but remained above 1.5 for most quarters, reflecting a healthy ability to meet short-term obligations.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has displayed a decreasing trend over time, indicating a potential decrease in immediate liquidity. However, the ratios have generally stayed above 0.3, suggesting that the company still has an acceptable level of quick assets to cover short-term liabilities.

Similarly, the cash ratio, which specifically assesses the company's ability to cover liabilities with its readily available cash and cash equivalents, has demonstrated a stable but modest decline over the quarters. Although the ratios have generally trended downwards, they have mostly remained above 0.3, indicating a reasonable level of cash reserves to meet short-term obligations.

Overall, while there have been some fluctuations in the liquidity ratios of Howmet Aerospace Inc, the company has maintained a satisfactory liquidity position with a healthy ability to meet its short-term financial commitments. Continual monitoring of these ratios will be crucial to ensure the company's liquidity remains at an optimal level.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Cash conversion cycle days 127.80 133.61 131.59 131.05 134.97 137.12 138.31 140.52 143.14 149.68 150.01 147.37 142.31 146.83 151.75 148.64 105.03 83.38 68.85 84.23

The cash conversion cycle of Howmet Aerospace Inc has shown fluctuations over the years. Initially, in March 2020, it stood at 84.23 days, indicating the number of days it takes for the company to convert its investments in inventory and other resources into cash flows.

The cycle decreased to 68.85 days by June 2020 but rose again to 105.03 days by December 2020, suggesting potential challenges in managing working capital efficiently. This trend continued into early 2021, with the cycle peaking at 151.75 days in June 2021.

However, there was a gradual improvement in the cash conversion cycle from September 2021 to December 2024. The cycle reduced consistently, indicating better management of cash inflows and outflows. By December 2024, the cycle had decreased to 127.80 days, signaling more effective working capital management and potentially quicker cash realization from operating activities compared to previous periods.

Overall, the analysis of Howmet Aerospace Inc's cash conversion cycle reflects fluctuations in the efficiency of its working capital management over time, with recent improvements suggesting a positive trend towards optimizing cash flows within the business.