| Key Facts: Century Aluminum’s Working Capital Management | |
| | |
|
Key Takeaways From Century Aluminum's 4Q Earnings (Part 10 of 16) (Continued from Part 9) Working capital management
Working capital management is a key focus area for any company. A company has to allocate funds towards its working capital. Generally, this capital is in the form of short-term borrowings. These borrowings have interest costs attached to them. As a result, companies’ interest expenses increase if they have higher working capital. In this part, we’ll analyze Century Aluminum’s working capital management.
It’s important to note that you can also access the metals and mining industry with the SPDR S&P Metals and Mining ETF (XME). Currently, Alcoa (AA) forms 4.01% of XME. In contrast, the Materials Select Sector ETF (XLB) has 3.30% invested in Alcoa.
Positive impact
Working capital management had a positive impact of $10 million on Century Aluminum’s (CENX) fourth quarter cash flows. Century Aluminum changed its suppliers’ payment terms. As a result, its days payable outstanding, or DPO, increased to 26.66 days. Its DPO was 21.49 days in 3Q14. You can define DPO as the average number of days that a company takes to pay its suppliers. A higher DPO is generally associated with good working capital management.
Century Aluminum also took more time to collect payments from its buyers. Its days sales outstanding, or DSO, increased in the fourth quarter. It took an average of 12.51 days to collect payment from its buyers. This can be seen in the above chart. Reliance Steel & Aluminum (RS) sources raw material from Century Aluminum.
However, working capital had a positive impact on Century Aluminum’s cash flows. There are several other parts of Century Aluminum’s cash flows that investors should understand. We’ll discuss them in more detail in the next part of this series.
Continue to Part 11 Browse this series on Market Realist:
|
|
| |
ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
Century Aluminum est une société de production minière basée aux Etats-Unis D'Amerique. Century Aluminum est cotée aux Etats-Unis D'Amerique. Sa capitalisation boursière aujourd'hui est 1,5 milliards US$ (1,4 milliards €). La valeur de son action a atteint son plus bas niveau récent le 06 mars 2009 à 1,06 US$, et son plus haut niveau récent le 16 mai 2024 à 17,22 US$. Century Aluminum possède 87 260 000 actions en circulation. |