Howmet Aerospace Inc (HWM)

Liquidity ratios

	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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Current ratio	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	1.42	1.32	1.66	1.65
Quick ratio	0.73	0.79	0.86	0.86	0.90	0.76	0.82	0.84	0.91	0.98	0.92	1.00	1.33	1.14	1.09	1.00	0.75	0.69	0.87	0.86
Cash ratio	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	0.40	0.30	0.37	0.36

The liquidity ratios of Howmet Aerospace Inc provide insight into the company's ability to meet its short-term obligations.

The current ratio has been relatively stable over the past eight quarters, ranging from 2.06 to 2.22. This indicates that the company generally has more than enough current assets to cover its current liabilities. A higher current ratio suggests a stronger liquidity position.

The quick ratio, which excludes inventory from current assets, has shown some variability but generally remains above 0.89, indicating that the company has an acceptable level of quick assets to cover its current liabilities. However, it is important to note that the quick ratio has been below 1 in most quarters, suggesting a reliance on inventory to meet short-term obligations.

The cash ratio, which is the most conservative measure of liquidity, has ranged from 0.46 to 0.67 over the past eight quarters. This indicates that Howmet Aerospace Inc may have limited cash on hand relative to its current liabilities. A higher cash ratio is typically preferred as it shows a stronger ability to meet short-term obligations with available cash.

Overall, while Howmet Aerospace Inc generally maintains acceptable liquidity ratios, there may be some room for improvement in terms of increasing its quick assets and cash reserves to better cover its short-term liabilities.

Additional liquidity measure

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cash conversion cycle	days	92.06	101.76	100.11	100.98	86.27	106.13	102.30	101.09	91.39	106.71	107.93	108.92	87.69	63.72	52.65	60.28	58.57	72.64	86.19	173.58

The cash conversion cycle of Howmet Aerospace Inc has shown some fluctuations over the past eight quarters. In Q4 2023, the company's cash conversion cycle decreased to 97.92 days compared to the previous quarter. This implies that the company took fewer days to convert its investments in inventory to cash receipts from customers.

Although the cycle improved in the latest quarter, it has been on a generally upward trend since Q3 2022, where it reached a peak of 114.58 days. This suggests that Howmet Aerospace may have faced challenges in managing its working capital efficiently during that period.

Overall, the company's cash conversion cycle has exhibited some volatility, indicating potential variability in Howmet Aerospace's ability to efficiently manage its cash flows, inventories, and receivables. Further analysis would be required to understand the underlying factors driving these fluctuations and to assess the company's working capital management strategies.