Kaiser Aluminum Corporation (KALU)

The liquidity ratios of Kaiser Aluminum Corporation show a declining trend over the years. The current ratio, which indicates the company's ability to cover short-term obligations with its current assets, decreased from 7.08 in 2020 to 2.44 in 2024. This suggests a reduction in the company's short-term liquidity position.

Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventories from current assets, also declined significantly from 4.93 in 2020 to 0.05 in 2024. This indicates a diminishing ability of the company to meet its immediate obligations without relying on inventory.

Furthermore, the cash ratio, a measure of the company's ability to cover its current liabilities with cash and cash equivalents, followed a similar downward trend from 4.93 in 2020 to 0.05 in 2024. This implies a decreasing level of cash resources relative to current liabilities.

Overall, the decreasing trend in all these liquidity ratios signals potential challenges for Kaiser Aluminum Corporation in meeting its short-term financial obligations with its current asset base. Further analysis and monitoring of the company's liquidity position may be necessary to ensure financial stability and operational continuity.

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Additional liquidity measure

The cash conversion cycle of Kaiser Aluminum Corporation has seen a general increasing trend over the past five years, going from 55.84 days at the end of 2020 to 68.35 days at the end of 2024. This indicates that the company is taking longer to convert its investments in inventory into cash receipts from customers.

The cash conversion cycle measures the time it takes for a company to convert its resources invested in inventory and accounts receivable into cash inflows from sales. A longer cash conversion cycle may indicate inefficiencies in managing inventory or collecting receivables, potentially tying up working capital.

Despite the increasing trend, it's important to analyze the components of the cash conversion cycle - the days inventory outstanding, days sales outstanding, and days payables outstanding - to identify the specific areas where Kaiser Aluminum Corporation may be facing challenges and opportunities for improvement in working capital management.