Kaiser Aluminum Corporation (KALU)

Short-term

Turnover ratios

Activity ratios provide insights into how efficiently a company manages its assets and liabilities.

1. Inventory Turnover: Kaiser Aluminum Corp's inventory turnover has been relatively stable over the past five years, ranging from 5.77 to 6.84. This indicates that the company is able to sell and replace its inventory multiple times within a year, which is a positive sign of efficient inventory management.

2. Receivables Turnover: The receivables turnover ratio has shown some fluctuation, with a peak in 2022 at 9.25 and a low in 2021 at 6.80. A higher turnover ratio suggests that the company is collecting its accounts receivable more quickly, which is important for maintaining healthy cash flows.

3. Payables Turnover: Kaiser Aluminum Corp's payables turnover has been consistently above 10 over the past five years, indicating that the company is able to efficiently manage its accounts payable. A high payables turnover ratio can signify good relationships with suppliers or effective cash management strategies.

4. Working Capital Turnover: The working capital turnover ratio has varied significantly, from a low of 1.22 in 2020 to a high of 5.49 in 2022. A higher turnover ratio indicates that the company is generating more revenue per dollar of working capital, reflecting efficient utilization of resources.

Overall, these activity ratios suggest that Kaiser Aluminum Corp has been effective in managing its assets and liabilities to optimize its operational performance and financial health over the past five years.

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Average number of days

Activity ratios provide insight into how efficiently a company is managing its assets and operations. Let's analyze Kaiser Aluminum Corp's activity ratios:

1. Days of Inventory on Hand (DOH):
- DOH has been gradually increasing over the five-year period, indicating that inventory turnover has slightly slowed down. This could suggest potential issues with managing inventory levels or changing demand patterns.

2. Days of Sales Outstanding (DSO):
- DSO has shown fluctuations over the years, with a notable increase in 2021 followed by a decrease in 2022 and then another increase in 2023. A higher DSO implies that the company is taking longer to collect its accounts receivable, which could lead to cash flow challenges.

3. Number of Days of Payables:
- The number of days of payables has also fluctuated, with a significant increase in 2021 followed by a decrease in 2022 and a further reduction in 2023. A longer payment period may indicate an attempt to manage cash flow or negotiate better terms with suppliers.

Overall, Kaiser Aluminum Corp should closely monitor these activity ratios to ensure that inventory, accounts receivable, and accounts payable are being managed effectively to optimize working capital and operational efficiency.

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Long-term

The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate revenue. Kaiser Aluminum Corp's fixed asset turnover has fluctuated over the years, ranging from 1.87 in 2020 to 3.38 in 2022. A higher fixed asset turnover indicates that the company is generating more revenue per dollar invested in fixed assets.

On the other hand, the total asset turnover ratio reflects how well a company is utilizing all its assets to generate sales. Kaiser Aluminum Corp's total asset turnover has shown a similar trend, with fluctuations ranging from 0.63 in 2020 to 1.50 in 2022. A higher total asset turnover indicates that the company is generating more revenue per dollar invested in both fixed and current assets.

Overall, Kaiser Aluminum Corp's efficiency in utilizing its assets to generate revenue has improved over the years, as evidenced by the increasing trend in both fixed asset turnover and total asset turnover ratios. This suggests that the company has been able to effectively manage and leverage its assets to drive sales growth and improve overall operational efficiency.