Albertsons Companies (ACI)

The liquidity ratios of Albertsons Companies over the specified period exhibit a declining trend, indicating a gradual deterioration in the company's short-term liquidity position. The current ratio has decreased from 1.02 as of February 28, 2021, to 0.74 as of February 28, 2023, before experiencing slight improvements to 0.84 in February 2024 and 0.90 in February 2025. This decline suggests that, initially, the company was just able to cover its current liabilities with its current assets, but the ratio has fallen below 1.0 in 2023, implying potential challenges in meeting short-term obligations without relying on additional liquid assets or cash flows.

Further analysis of the quick ratio reveals a similar downward trajectory, dropping from 0.33 in 2021 to 0.14 in 2023, with marginal stabilization at 0.13 in 2024 and a slight increase to 0.16 in 2025. The quick ratio's decline indicates a diminishing proportion of liquid assets (excluding inventory) available to cover current liabilities, which can raise concerns about the company's immediate liquidity position.

The cash ratio, representing the most conservative measure of liquidity, has also declined markedly from 0.25 in 2021 to a low of 0.06 in 2023. Although there is marginal improvement in subsequent years, reaching 0.04 in 2024 and 0.06 in 2025, these levels remain significantly below 1.0. This suggests that the company's cash holdings alone are insufficient to cover its current liabilities fully, highlighting potential liquidity constraints.

Overall, the analysis indicates a declining trend in all three key liquidity ratios, with the most notable deterioration occurring in 2023. While there are modest signs of stabilization afterward, the ratios remain below desired levels, which may reflect increased short-term liquidity risks. This pattern warrants continued monitoring for potential implications on the company's operational flexibility and financial stability in the near to medium term.

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Additional liquidity measure

The analysis of Albertsons Companies’ cash conversion cycle (CCC) over the specified period reveals fluctuations that illustrate its operational liquidity management and efficiency in managing working capital.

On February 28, 2021, the CCC stood at approximately 8.91 days, indicating that, on average, it took Albertsons roughly nine days to convert its investments in inventory and other resources into cash flows from sales. Moving into February 28, 2022, the cycle contracted significantly to approximately 4.73 days, nearly halving its duration, which suggests an improvement in the company's operational efficiency and possibly faster inventory turnover or receivables collection during that period.

However, this shortened cycle was not sustained, as by February 28, 2023, the CCC increased again to about 7.21 days, indicating a slight elongation relative to the previous year but still shorter than the cycle in 2021. This could reflect adjustments in supply chain or credit policies that temporarily affected liquidity timings.

Further fluctuations are observed in the following years: on February 29, 2024, the cycle marginally increased to approximately 7.85 days, suggesting a modest elongation possibly due to seasonal factors or changes in vendor payment terms. The trend continued with an increase to roughly 9.42 days on February 28, 2025, returning closer to the 2021 levels, which may imply a return to more traditional inventory management or longer receivables collection periods.

Overall, the data indicates variability in Albertsons Companies’ cash conversion cycle over the four-year span, with periods of both improvement and elongation. The shorter cycle in 2022 could be interpreted as a period of enhanced operational efficiency, whereas the subsequent increases suggest adjustments or challenges in maintaining that efficiency, impacting the firm's cash flow management and working capital duration.