Inventories are carried at the lower of cost or market, with cost for a substantial portion of U.S. and Canadian inventories determined under the last-in, first-out (LIFO) method. The cost of other inventories is principally determined under the average-cost method.
Source: Alcoa Inc., Annual Report
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Alcoa Inc., Statement of Financial Position, Inventory
USD $ in millions
| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
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Finished goods | |
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Work-in-process | |
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Bauxite and alumina | |
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Purchased raw materials | |
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Operating supplies | |
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Inventories | |
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Source: Based on data from Alcoa Inc. Annual Reports
| Item | Description | The company |
|---|---|---|
| Finished goods | Carrying amount as of the balance sheet date of merchandise or goods held by the company that are readily available for sale. | Alcoa Inc.'s finished goods increased from 2009 to 2010 and from 2010 to 2011. |
| Work-in-process | Carrying amount as of the balance sheet date of merchandise or goods which are partially completed, are generally comprised of raw materials, labor and factory overhead costs, and which require further materials, labor and overhead to be converted into finished goods, and which generally require the use of estimates to determine percentage complete and pricing. | Alcoa Inc.'s work-in-process increased from 2009 to 2010 and from 2010 to 2011. |
| Purchased raw materials | Carrying amount as of the balance sheet date of unprocessed items to be consumed in the manufacturing or production process. Also includes purchased parts that will be used as components of a finished product. | Alcoa Inc.'s purchased raw materials increased from 2009 to 2010 and from 2010 to 2011. |
| Operating supplies | Carrying amount as of the balance sheet date of products used directly or indirectly in the manufacturing or production process, which may or may not become part of the final product. May also include items used in the storage, presentation or transportation of physical goods. | Alcoa Inc.'s operating supplies increased from 2009 to 2010 and from 2010 to 2011. |
| Inventories | Carrying amount (lower of cost or market) as of the balance sheet date of inventories less all valuation and other allowances. Excludes noncurrent inventory balances (expected to remain on hand past one year or one operating cycle, if longer). | Alcoa Inc.'s inventories increased from 2009 to 2010 and from 2010 to 2011. |
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Adjusting LIFO Inventory to FIFO (Current) Cost
USD $ in millions
| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
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| Adjustment to Inventories | ||||||
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Inventories at LIFO (as reported) | |
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Add: LIFO reserve | |
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Inventories at FIFO (adjusted) | |
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| Adjustment to Current Assets | ||||||
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Current assets (as reported) | |
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Add: LIFO reserve | |
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Current assets (adjusted) | |
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| Adjustment to Total Assets | ||||||
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Total assets (as reported) | |
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Add: LIFO reserve | |
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Total assets (adjusted) | |
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| Adjustment to Alcoa Shareholders’ Equity | ||||||
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Alcoa shareholders’ equity (as reported) | |
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Add: LIFO reserve | |
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Alcoa shareholders’ equity (adjusted) | |
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| Adjustment to Net Income (loss) Attributable To Alcoa | ||||||
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Net income (loss) attributable to Alcoa (as reported) | |
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Add: Increase (decrease) in LIFO reserve | |
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Net income (loss) attributable to Alcoa (adjusted) | |
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Alcoa Inc.'s inventory value on Dec 31, 2011 would be $3,700 (in millions) if the FIFO inventory method was used instead of LIFO. Alcoa Inc.'s inventories, valued on a LIFO basis, on Dec 31, 2011 were $2,899 . Alcoa Inc.'s inventories would have been $801 higher than reported on Dec 31, 2011 if the FIFO method had been used instead.
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Alcoa Inc., adjusted ratios
| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| Current Ratio | ||||||
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Reported current ratio (LIFO) | |
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Adjusted current ratio (FIFO) | |
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| Net Profit Margin | ||||||
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Reported net profit margin (LIFO) | % |
% |
% |
% |
% |
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Adjusted net profit margin (FIFO) | % |
% |
% |
% |
% |
| Total Asset Turnover | ||||||
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Reported total asset turnover (LIFO) | |
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Adjusted total asset turnover (FIFO) | |
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| Financial Leverage | ||||||
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Reported financial leverage (LIFO) | |
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Adjusted financial leverage (FIFO) | |
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| Return on Equity (ROE) | ||||||
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Reported ROE (LIFO) | % |
% |
% |
% |
% |
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Adjusted ROE (FIFO) | % |
% |
% |
% |
% |
| Return on Assets (ROA) | ||||||
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Reported ROA (LIFO) | % |
% |
% |
% |
% |
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Adjusted ROA (FIFO) | % |
% |
% |
% |
% |
| Ratio | Description | The company |
|---|---|---|
| Adjusted current ratio | A liquidity ratio calculated as adjusted current assets divided by current liabilities. | Alcoa Inc.'s adjusted current ratio improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011. |
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted net income divided by revenue. | Alcoa Inc.'s adjusted net profit margin improved from 2009 to 2010 and from 2010 to 2011. |
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Alcoa Inc.'s adjusted total asset turnover improved from 2009 to 2010 and from 2010 to 2011. |
| Adjusted financial leverage | A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income. |
Alcoa Inc.'s adjusted financial leverage declined from 2009 to 2010 but then slightly increased from 2010 to 2011. |
| Adjusted ROE | A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity. | Alcoa Inc.'s adjusted ROE improved from 2009 to 2010 and from 2010 to 2011. |
| Adjusted ROA | A profitability ratio calculated as adjusted net income divided by adjusted total assets. | Alcoa Inc.'s adjusted ROA improved from 2009 to 2010 and from 2010 to 2011. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
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Current assets (USD $ in millions) | |
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Current liabilities (USD $ in millions) | |
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Current ratio1 | |
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| Adjusted: from LIFO to FIFO | ||||||
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Adjusted current assets (USD $ in millions) | |
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Current liabilities (USD $ in millions) | |
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Adjusted current ratio2 | |
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2011 Calculations
1 Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Adjusted current ratio | A liquidity ratio calculated as adjusted current assets divided by current liabilities. | Alcoa Inc.'s adjusted current ratio improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
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Net income (loss) attributable to Alcoa (USD $ in millions) | |
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Sales (USD $ in millions) | |
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Net profit margin1 | % |
% |
% |
% |
% |
| Adjusted: from LIFO to FIFO | ||||||
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Adjusted net income (loss) attributable to Alcoa (USD $ in millions) | |
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Sales (USD $ in millions) | |
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Adjusted net profit margin2 | % |
% |
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2011 Calculations
1 Net profit margin = 100 × Net income (loss) attributable to Alcoa ÷ Sales
= 100 × ÷ = %
2 Adjusted net profit margin = 100 × Adjusted net income (loss) attributable to Alcoa ÷ Sales
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted net income divided by revenue. | Alcoa Inc.'s adjusted net profit margin improved from 2009 to 2010 and from 2010 to 2011. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
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Sales (USD $ in millions) | |
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Total assets (USD $ in millions) | |
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Total asset turnover1 | |
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| Adjusted: from LIFO to FIFO | ||||||
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Sales (USD $ in millions) | |
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Adjusted total assets (USD $ in millions) | |
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Adjusted total asset turnover2 | |
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2011 Calculations
1 Total asset turnover = Sales ÷ Total assets
= ÷ =
2 Adjusted total asset turnover = Sales ÷ Adjusted total assets
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Adjusted total asset turnover | An activity ratio calculated as total revenue divided by adjusted total assets. | Alcoa Inc.'s adjusted total asset turnover improved from 2009 to 2010 and from 2010 to 2011. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
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Total assets (USD $ in millions) | |
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Alcoa shareholders’ equity (USD $ in millions) | |
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Financial leverage1 | |
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| Adjusted: from LIFO to FIFO | ||||||
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Adjusted total assets (USD $ in millions) | |
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Adjusted alcoa shareholders’ equity (USD $ in millions) | |
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Adjusted financial leverage2 | |
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2011 Calculations
1 Financial leverage = Total assets ÷ Alcoa shareholders’ equity
= ÷ =
2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted alcoa shareholders’ equity
= ÷ =
| Ratio | Description | The company |
|---|---|---|
| Adjusted financial leverage | A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income. |
Alcoa Inc.'s adjusted financial leverage declined from 2009 to 2010 but then slightly increased from 2010 to 2011. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
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Net income (loss) attributable to Alcoa (USD $ in millions) | |
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Alcoa shareholders’ equity (USD $ in millions) | |
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ROE1 | % |
% |
% |
% |
% |
| Adjusted: from LIFO to FIFO | ||||||
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Adjusted net income (loss) attributable to Alcoa (USD $ in millions) | |
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Adjusted alcoa shareholders’ equity (USD $ in millions) | |
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Adjusted ROE2 | % |
% |
% |
% |
% |
2011 Calculations
1 ROE = 100 × Net income (loss) attributable to Alcoa ÷ Alcoa shareholders’ equity
= 100 × ÷ = %
2 Adjusted ROE = 100 × Adjusted net income (loss) attributable to Alcoa ÷ Adjusted alcoa shareholders’ equity
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Adjusted ROE | A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity. | Alcoa Inc.'s adjusted ROE improved from 2009 to 2010 and from 2010 to 2011. |
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| Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Dec 31, 2007 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
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Net income (loss) attributable to Alcoa (USD $ in millions) | |
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Total assets (USD $ in millions) | |
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ROA1 | % |
% |
% |
% |
% |
| Adjusted: from LIFO to FIFO | ||||||
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Adjusted net income (loss) attributable to Alcoa (USD $ in millions) | |
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Adjusted total assets (USD $ in millions) | |
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Adjusted ROA2 | % |
% |
% |
% |
% |
2011 Calculations
1 ROA = 100 × Net income (loss) attributable to Alcoa ÷ Total assets
= 100 × ÷ = %
2 Adjusted ROA = 100 × Adjusted net income (loss) attributable to Alcoa ÷ Adjusted total assets
= 100 × ÷ = %
| Ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as adjusted net income divided by adjusted total assets. | Alcoa Inc.'s adjusted ROA improved from 2009 to 2010 and from 2010 to 2011. |
May 23, 2012