Albertsons Companies (ACI)

The liquidity position of Albertsons Companies over the period from May 2020 to February 2025 reflects notable trends across the key current ratio, quick ratio, and cash ratio metrics.

The current ratio, which measures the company's ability to meet short-term obligations with its current assets, generally remains above 1.0 until November 2022. It experienced fluctuations within a narrow margin, peaking at approximately 1.13 in late 2020 and mid-2021, indicating a relatively stable liquidity buffer during these periods. However, beginning in November 2022, there is a downward trend, with the ratio declining to a low of around 0.74 in February 2023. From that point onward, the current ratio shows a gradual recovery, rising steadily back toward 0.90 by February 2025. This indicates that the company's capacity to cover short-term liabilities with current assets has weakened in late 2022 but has begun to improve.

The quick ratio, which excludes inventory and assesses liquidity more conservatively, demonstrates a different trend. It remains well below 1.0 throughout the analyzed period, with values generally hovering between 0.33 and 0.50 until late 2022. The rapid decline is evident in early 2023, with the ratio reaching as low as 0.12 in May 2023. Post this trough, the quick ratio stabilizes at a modest level around 0.14 to 0.16, suggesting limited immediate liquidity when excluding inventories.

The cash ratio, the most conservative measure, indicates a consistent decline over time. It remains below 0.40 from May 2020 onward, with a significant drop observed after November 2022—reaching a minimum of 0.03 in early 2023. Although slight improvements are observed thereafter, the cash ratio continues to remain low, around 0.03 to 0.04, indicating a limited proportion of cash and cash equivalents relative to current liabilities.

Overall, the data suggests that Albertsons Companies experienced a period of relatively stable liquidity from mid-2020 through late 2022, with ratios comfortably above critical thresholds. However, from late 2022 onwards, liquidity metrics deteriorate markedly, particularly affecting the quick and cash ratios, which *indicate reduced immediate liquidity and cash reserves*. While the current ratio recovers modestly, it remains near or below 1.0, reflecting ongoing challenges in short-term liquidity management. The trend underscores the need for closer examination of working capital efficiency and cash management strategies moving forward.

---

Additional liquidity measure

The analysis of Albertsons Companies' cash conversion cycle (CCC) over the specified period reveals notable fluctuations and an overall relatively stable range. The CCC, which measures the time in days that a company's cash is tied up in the operating cycle, oscillated between a low of approximately 4.73 days in February 2022 and a high of around 12.14 days in November 2020.

During 2020, the cycle was relatively stable, fluctuating slightly around 9.5 to 12 days, indicating consistent operational efficiency in managing receivables, inventory, and payables amid the initial impacts of the pandemic. The cycle showed a decreasing trend into early 2021, hitting a low of approximately 7.54 days in August 2021, before rising again toward the end of that year and into 2022. Notably, November 2022 demonstrated a higher CCC at around 10.44 days, suggesting increased cash tie-up, possibly due to inventory buildup or extended receivables.

In 2023, the CCC demonstrated some variability but remained within an approximate range of 7.18 to 10.56 days. Data from the initial months of 2024 show a slight decline, with the cycle shortening to about 8.01 days in February before increasing again toward 11.27 days in November 2024. The forecasted figures for the first quarter of 2025 suggest a continued elevation to approximately 9.37 days.

Overall, the company has maintained a stable operating cycle with periodic deviations, reflecting ongoing management of receivables, inventory, and payables strategies. These fluctuations are typical within retail operations and can be influenced by factors such as seasonal demand, inventory management policies, supplier terms, and credit policies. The general trend indicates an ability to sustain operational efficiency with some cyclical variations, without significant deterioration or improvements over the analyzed period.