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GuruFocus has detected 2 Warning Signs with Alcoa Corp $AA.
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Alcoa Corp (NYSE:AA)
Days Inventory
51.00 (As of Jun. 2017)

Alcoa Corp's average inventory for the three months ended in Jun. 2017 was $1,291 Mil. Alcoa Corp's cost of goods sold for the three months ended in Jun. 2017 was $2,309 Mil. Hence, Alcoa Corp's days inventory for the three months ended in Jun. 2017 was 51.00.

AA' s Days Inventory Range Over the Past 10 Years
Min: 25.97   Max: 53.97
Current: 52.67

25.97
53.97

During the past 4 years, Alcoa Corp's highest Days Inventory was 53.97. The lowest was 25.97. And the median was 53.89.

AA's Days Inventory is ranked higher than
65% of the 605 Companies
in the Global Aluminum industry.

( Industry Median: 74.58 vs. AA: 52.67 )

Alcoa Corp's days inventory declined from Jun. 2016 (55.97) to Jun. 2017 (51.00).

Warning Sign:

If a company builds up inventory, it may mean it is having difficulties selling its goods.

Inventory can be measured by Days Sales of Inventory (DSI). Alcoa Corp's days sales of inventory (DSI) for the three months ended in Jun. 2017 was 41.19.

Inventory turnover measures how fast the company turns over its inventory within a year. Alcoa Corp's inventory turnover for the three months ended in Jun. 2017 was 1.79.

Inventory to revenue ratio determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue. Alcoa Corp's inventory to revenue ratio for the three months ended in Jun. 2017 was 0.45.


Definition

Days Inventory indicates the number of days of goods in sales that a company has in the inventory.

Alcoa Corp's Days Inventory for the fiscal year that ended in Dec. 2016 is calculated as

Days Inventory (A: Dec. 2016 )
=Average Inventory / COGS*Days in Period
=( (Inventory (A: Dec. 2015 ) + Inventory (A: Dec. 2016 )) / 2 ) / COGS (A: Dec. 2016 )*Days in Period
=( (1172 + 1160) / 2 ) / 7898*365
=1166 / 7898*365
=53.89

Alcoa Corp's Days Inventory for the quarter that ended in Jun. 2017 is calculated as:

Days Inventory (Q: Jun. 2017 )
=Average Inventory / COGS*Days in Period
=( (Inventory (Q: Mar. 2017 ) + Inventory (Q: Jun. 2017 )) / 2 ) / COGS (Q: Jun. 2017 )*Days in Period
=( (1294 + 1287) / 2 ) / 2309*365 / 4
=1290.5 / 2309*365 / 4
=51.00

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Explanation

An increase of Days Inventory may indicate the company's sales slowed.

1. Inventory can be measured by Days Sales of Inventory (DSI).

Alcoa Corp's Days Sales of Inventory for the three months ended in Jun. 2017 is calculated as

Days Sales of Inventory (DSI)=Average Inventory/Revenue*Days in Period
=1290.5/2859*365 / 4
=41.19

2. Inventory Turnover measures how fast the company turns over its inventory within a year.

Alcoa Corp's Inventory Turnover for the three months ended in Jun. 2017 is calculated as

3. Inventory to Revenue determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue.

Alcoa Corp's Inventory to Revenue for the three months ended in Jun. 2017 is calculated as

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Be Aware

A lot of business are seasonable. It makes more sense to compare Days Inventory from the same period in the previous year instead of from the previous quarter.


Related Terms

Cost of Goods Sold, Inventory, Revenue, Inventory Turnover, Inventory to Revenue


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Alcoa Corp Annual Data

Dec13Dec14Dec15Dec16
DaysInventory 0.000.000.000.000.000.000.0025.9753.9753.89

Alcoa Corp Quarterly Data

Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17Jun17
DaysInventory 0.000.000.0024.7958.0755.9754.7850.2254.8051.00
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