American Airlines Group Inc. (NASDAQ:AAL)

Inventory Turnover

The inventory turnover ratio experienced a significant decline from 24.73 in 2019 to 10.74 in 2020, reflecting a slower movement of inventory likely due to external disruptions. Following this, the ratio showed a steady recovery, increasing to 16.65 in 2021, 21.49 in 2022, and further to 22 in 2023, approaching pre-2020 levels.

Receivables Turnover

Receivables turnover exhibited a similar U-shaped pattern. It decreased sharply from 26.15 in 2019 to 12.92 in 2020, indicating slower collection of receivables. However, a consistent improvement ensued, with the ratio rising to 19.86 in 2021, 22.91 in 2022, and reaching 26.06 in 2023, surpassing the 2019 figure.

Payables Turnover

The payables turnover ratio also declined markedly from 22.2 in 2019 to 14.5 in 2020, suggesting delayed payments to suppliers. Subsequent years showed incremental recovery: 16.86 in 2021, a marked increase to 22.79 in 2022, and a slight decrease to 22.43 in 2023, largely consistent with earlier performance levels.

Average Inventory Processing Period

The average inventory processing period lengthened dramatically from 15 days in 2019 to 34 days in 2020, reflective of slower inventory movement. Thereafter, it shortened progressively to 22 days in 2021, then stabilized at 17 days in both 2022 and 2023, approaching the more efficient pre-2020 period.

Average Receivable Collection Period

The average receivable collection period doubled from 14 days in 2019 to 28 days in 2020, signaling slower cash inflows. This metric improved steadily in the following years, decreasing to 18 days in 2021, 16 days in 2022, and returning to 14 days in 2023, indicating a restoration of efficient credit management.

Operating Cycle

The operating cycle increased significantly from 29 days in 2019 to 62 days in 2020, highlighting the impact of delayed inventory turnover and receivables collection. This cycle contracted over subsequent years to 40 days in 2021, then 33 days in 2022, and 31 days in 2023, moving back toward historical operating efficiency.

Average Payables Payment Period

This period lengthened notably from 16 days in 2019 to 25 days in 2020, suggesting extended payment terms or delayed payments to suppliers during the challenging year. It then decreased to 22 days in 2021, and returned to 16 days in 2022 and 2023, signaling a normalization of payment practices.

Cash Conversion Cycle

The cash conversion cycle deteriorated from 13 days in 2019 to 37 days in 2020, indicating inefficient cash flow management during this period. Following this peak, the cycle shortened markedly to 18 days in 2021, then remained close to this level with 17 days in 2022 and further improvement to 15 days in 2023, consistent with greater operational cash efficiency.

Working Capital Turnover

No data is available for working capital turnover across all periods.

Operating Revenues

Operating revenues experienced a significant decline from 45,768 million US dollars in 2019 to 17,337 million US dollars in 2020, reflecting a sharp downturn possibly due to external factors impacting operations. From 2020 onwards, there was a strong recovery trend, with revenues increasing to 29,882 million in 2021 and continuing upward to 48,971 million in 2022. The growth persisted into 2023, reaching 52,788 million US dollars, slightly surpassing the pre-2020 level.

Aircraft Fuel, Spare Parts and Supplies, Net

Costs related to aircraft fuel, spare parts, and supplies showed a decrease from 1,851 million US dollars in 2019 to 1,614 million in 2020, aligning with the reduction in operating activities. Subsequently, these costs steadily increased each year: 1,795 million in 2021, 2,279 million in 2022, and 2,400 million in 2023, indicating rising operational expenses correlated with the revenue recovery and increased aircraft utilization.

Inventory Turnover Ratio

The inventory turnover ratio demonstrated a significant drop from 24.73 in 2019 to 10.74 in 2020, which suggests a slower movement of inventory items during the downturn period. The ratio improved markedly over the next three years, rising to 16.65 in 2021, 21.49 in 2022, and reaching 22 in 2023, reflecting enhanced efficiency in inventory management and increased operational activity parallel to the recovery in revenues.

The analyzed financial data reveals notable trends over the five-year period ending in 2023. The operating revenues exhibited a significant decline in 2020, followed by a progressive recovery in subsequent years, ultimately surpassing the pre-decline level by the end of 2023.

Operating Revenues

Operating revenues decreased sharply from 45,768 million US dollars in 2019 to 17,337 million US dollars in 2020. This drop is indicative of a significant operational impact during that year. However, starting in 2021, revenues began to recover, reaching 29,882 million US dollars, and further increasing to 48,971 million in 2022. By 2023, operating revenues reached 52,788 million US dollars, marking a full recovery and slight growth beyond the 2019 level.

Accounts Receivable, Net

Accounts receivable, net, followed a different pattern. Starting from 1,750 million US dollars in 2019, the figure decreased to 1,342 million in 2020. It rose modestly to 1,505 million in 2021 and increased more substantially to 2,138 million in 2022 before slightly declining to 2,026 million in 2023. This pattern suggests some variability in credit extended to customers relative to the fluctuations in revenues.

Receivables Turnover

The receivables turnover ratio, which measures how efficiently the company collects its receivables, showed considerable fluctuation over the period. It started at a high level of 26.15 in 2019, declined sharply to 12.92 in 2020, reflecting slower collections or increased credit terms during the revenue downturn, and then progressively improved to 19.86 in 2021 and 22.91 in 2022. By 2023, the ratio had nearly returned to its 2019 level at 26.06, indicating a restoration of collection efficiency similar to pre-decline conditions.

Overall, the financial data depicts a company experiencing a significant disruption in 2020 with substantial revenue impact and operational challenges. Subsequent years have shown a steady and comprehensive recovery in revenues and collection efficiency, culminating in performance levels that meet or exceed those before the downturn. The variability in accounts receivable amounts compared to the revenues suggests cautious management of credit policies aligned with fluctuating business conditions.

Operating Revenues

The operating revenues exhibited a significant decline from 45,768 million USD in 2019 to 17,337 million USD in 2020. This represents a substantial reduction likely influenced by adverse external conditions impacting operations. However, a strong recovery trajectory is observed in the following years with revenues increasing to 29,882 million USD in 2021, 48,971 million USD in 2022, and reaching 52,788 million USD in 2023. The upward trend from 2021 onwards suggests progressive improvements in operational activities and market conditions.

Accounts Payable

Accounts payable showed a declining trend from 2,062 million USD in 2019 to 1,196 million USD in 2020, consistent with the reduction in operating scale. Subsequently, accounts payable increased annually, reaching 1,772 million USD in 2021, 2,149 million USD in 2022, and 2,353 million USD in 2023. This pattern reflects the expansion of operational activities and higher procurement or other obligations corresponding to the increase in revenues.

Payables Turnover Ratio

The payables turnover ratio declined sharply from 22.2 in 2019 to 14.5 in 2020, indicating that the company took longer to settle its payables during the downturn period. It improved in 2021 to 16.86 and witnessed a marked increase in 2022 to 22.79, nearly reaching pre-2019 levels, followed by a slight decrease to 22.43 in 2023. This suggests a restoration of payment efficiency and better management of payables as financial conditions stabilized.

Working Capital

The working capital has consistently remained negative throughout the five-year period, indicating that current liabilities exceed current assets. It improved notably in 2021, reaching the least negative value at -1,670 million US dollars. However, after 2021, the working capital deteriorated again, declining to -6,227 million in 2022 and further to -8,490 million in 2023. This suggests increasing short-term liquidity challenges in the most recent years.

Operating Revenues

Operating revenues exhibited significant volatility over the period analyzed. There was a sharp decline from 45,768 million US dollars in 2019 to 17,337 million in 2020, reflecting a substantial reduction likely related to external disruptions during that year. Post-2020, the revenues demonstrated a robust recovery trajectory, increasing to 29,882 million in 2021 and then surpassing the pre-2020 levels with 48,971 million in 2022. The upward trend continued in 2023, reaching 52,788 million US dollars, which indicates strong business recovery and growth momentum.

Working Capital Turnover

No data was provided for working capital turnover, thus it is not possible to evaluate the efficiency of working capital utilization over the reported years.

Inventory Turnover

The inventory turnover ratio experienced a significant decline from 24.73 in 2019 to 10.74 in 2020, indicating a slower pace of inventory movement during that year. This sharp decrease likely reflects operational disruptions or changes in demand. However, the ratio showed a strong recovery in the subsequent years, rising to 16.65 in 2021 and further increasing to 21.49 in 2022, before stabilizing at 22 in 2023. The upward trend from 2020 onwards suggests improved efficiency in inventory management and increased sales relative to inventory held.

Average Inventory Processing Period

The average inventory processing period exhibited an inverse pattern to the inventory turnover ratio. It increased markedly from 15 days in 2019 to 34 days in 2020, indicating that inventory remained on hand much longer during 2020, consistent with reduced inventory turnover. After 2020, the processing period shortened significantly to 22 days in 2021, followed by further reductions to 17 days in both 2022 and 2023. This shortening of inventory holding periods suggests enhanced operational efficiency and faster inventory movement starting from 2021.

Receivables Turnover

The receivables turnover ratio experienced a significant decline from 26.15 in 2019 to 12.92 in 2020, indicating a reduction in the efficiency of collecting receivables during that period. This was likely influenced by external factors affecting the business environment in 2020. Subsequently, the ratio improved steadily over the following years, increasing to 19.86 in 2021, then to 22.91 in 2022, and nearly returning to the pre-decline level at 26.06 in 2023. This trend suggests a recovery in the company's effectiveness in managing and collecting its receivables.

Average Receivable Collection Period

The average number of days required to collect receivables mirrored the inverse pattern of the turnover ratio. It doubled from 14 days in 2019 to 28 days in 2020, signifying a slower collection process during that year. Following this peak, the collection period decreased progressively, dropping to 18 days in 2021, 16 days in 2022, and returning to 14 days in 2023, corresponding to the improvements seen in the receivables turnover ratio.

Overall Analysis

The data indicates that the company faced challenges in receivables management in 2020, with less efficient collection practices leading to longer collection periods and a lower receivables turnover ratio. However, the subsequent period shows a consistent improvement, with metrics steadily normalizing by 2023. This reflects a successful effort to enhance cash flow and receivables management efficiency over the analyzed timeframe.

Average Inventory Processing Period

The average inventory processing period showed a significant increase from 15 days in 2019 to 34 days in 2020, indicating a slowdown in inventory turnover during that year. Subsequently, it decreased to 22 days in 2021 and further improved to 17 days by 2022, maintaining that level in 2023. This suggests a recovery in inventory management efficiency after the initial disruption in 2020.

Average Receivable Collection Period

The average receivable collection period doubled from 14 days in 2019 to 28 days in 2020, reflecting slower collection of receivables possibly due to external challenges. However, this period shortened progressively over the next three years, reaching 18 days in 2021, 16 days in 2022, and returning to the original 14 days by 2023. This trend indicates an improvement in credit and collection policies restoring the company's cash flow cycle.

Operating Cycle

The operating cycle, combining inventory and receivables management, increased sharply from 29 days in 2019 to 62 days in 2020, highlighting a significant elongation of the overall cash conversion cycle. It then contracted steadily to 40 days in 2021, 33 days in 2022, and 31 days in 2023. These changes demonstrate a gradual recovery towards pre-2020 operating efficiency levels.

Payables Turnover

The payables turnover ratio experienced significant fluctuations over the five-year period. It started at 22.2 in 2019, sharply declined to 14.5 in 2020, indicating a slower payment cycle or increased accounts payable relative to purchases during that year. Subsequently, the ratio increased gradually to 16.86 in 2021 and then improved markedly to 22.79 in 2022, almost returning to the 2019 level. In 2023, it remained relatively stable at 22.43, suggesting a consistent pace in payment obligations relative to purchases.

Average Payables Payment Period

The average payables payment period mirrored the inverse trend of the payables turnover. Starting from 16 days in 2019, this period extended notably to 25 days in 2020, reflecting longer durations taken to settle payables during that year. In 2021, it shortened somewhat to 22 days and then returned to 16 days in both 2022 and 2023. This indicates a return to the quicker payment practices seen in 2019, implying an improvement in managing payables and possibly better liquidity or supplier relationships.

Overall Analysis

The year 2020 stands out as an anomaly likely due to external pressures, such as disruptions in the aviation industry, leading to slower payables turnover and longer payment periods. The recovery in 2021 and stabilization in 2022 and 2023 suggest that operational and financial management adapted effectively following the initial impact. The company's ability to return to more efficient payment cycles suggests strengthening control over payables and potential improvements in cash flow management.

Average Inventory Processing Period

The average inventory processing period exhibited a significant increase from 15 days in 2019 to 34 days in 2020, indicating a slower turnover of inventory. Subsequently, this period declined steadily to 22 days in 2021 and further improved to 17 days in both 2022 and 2023. This trend suggests a recovery and optimization in inventory management following the peak delay in 2020.

Average Receivable Collection Period

The average receivable collection period doubled from 14 days in 2019 to 28 days in 2020, reflecting a slowdown in collecting receivables. Thereafter, it shortened to 18 days in 2021, continued to improve to 16 days in 2022, and reached 14 days in 2023, which is consistent with the pre-2020 level. This pattern implies enhanced efficiency in accounts receivable collection over time after the 2020 disruption.

Average Payables Payment Period

The average payables payment period experienced an increase from 16 days in 2019 to 25 days in 2020, indicating a delay in settling payables. However, it decreased to 22 days in 2021 and further declined to 16 days in both 2022 and 2023, returning to the initial level observed in 2019. This suggests that the company reinstated its previous payment practices following the temporary extension in 2020.

Cash Conversion Cycle

The cash conversion cycle lengthened substantially from 13 days in 2019 to 37 days in 2020, highlighting a deterioration in the overall working capital efficiency during that year. Subsequently, it contracted to 18 days in 2021, remained relatively stable at 17 days in 2022, and further improved to 15 days in 2023. Overall, the cash conversion cycle shows a recovery trend towards more efficient management, though it remained slightly above the 2019 level by 2023.