Amcor PLC (AMCR)

Short-term

Turnover ratios

The activity ratios of Amcor PLC for the period from June 30, 2021, to June 30, 2025, reflect several notable trends and deviations across inventory turnover, receivables turnover, payables turnover, and working capital turnover.

Inventory Turnover:
The inventory turnover ratio exhibits fluctuations over the specified period. It increased from 5.09 in June 2021 to 5.41 in June 2023, indicating an improvement in inventory management and more efficient inventory utilization in that interval. However, a slight decline is observed in June 2024, with the ratio decreasing to 5.38, suggesting a marginal slowdown in inventory turnover. The significant drop to 3.51 in June 2025 signals a notable reduction in the frequency of inventory turnover, which may imply accumulating inventory, potential overstock issues, or decreased sales velocity.

Receivables Turnover:
Receivables turnover demonstrates a steady upward trend from 6.90 in June 2021 to a peak of 7.84 in June 2023, reflecting an enhancement in the effectiveness of collecting receivables and shorter collection periods. Post-2023, there is a decline to 7.39 in June 2024, and further sharply to 4.38 in June 2025, indicating a significant deterioration in receivables management. This decline suggests that the company is taking longer to collect outstanding receivables, which could impact cash flow and liquidity.

Payables Turnover:
The payables turnover ratio increases from 3.94 in June 2021 to 4.45 in June 2023, demonstrating a tendency to settle payables more quickly during this period. Subsequently, the ratio declines to 4.23 in June 2024 and further to 3.49 in June 2025. The reduction in payables turnover ratio over the latter years indicates an extension in the period the company takes to pay its suppliers, possibly reflecting deliberate credit management strategies, cash conservation measures, or supplier negotiation outcomes.

Working Capital Turnover:
The working capital turnover ratio shows considerable variability, rising from 13.96 in June 2021 to a peak of 19.39 in June 2022, and maintaining similar levels in June 2024 at 19.37. These elevations suggest periods of efficient utilization of working capital to generate sales. Nonetheless, the ratio declines to 17.66 in June 2023 and starkly drops to 10.37 in June 2025. This sharp decrease indicates a less efficient deployment of working capital in generating sales, which could be attributable to increased inventory, receivables, or lower sales relative to working capital investments.

Summary of Trends:
Overall, Amcor PLC’s activity ratios reveal a period of operational efficiency improvement up to 2023, followed by notable declines in 2024 and 2025. The reductions in inventory and receivables turnover ratios in 2025 may signal difficulties in inventory management and collection efficiency. The decline in payables turnover ratio suggests a lengthening of payment periods, potentially impacting relationships with suppliers or reflecting strategic liquidity management. The decreasing working capital turnover ratio further underscores a potential deterioration in overall operational efficiency, warranting attention to underlying operational or market factors affecting activity management.

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Average number of days

The analysis of Amcor PLC's activity ratios over the period from June 30, 2021, to June 30, 2025, yields insights into its operational efficiency and working capital management.

Days of Inventory on Hand (DOH):
- The DOH initially increased from approximately 71.75 days in 2021 to 75.93 days in 2022, indicating a slight buildup in inventory levels during this period.
- Subsequently, the DOH decreased to 67.49 days in 2023, and marginally increased to 67.85 days in 2024, suggesting improved inventory turnover and more efficient management of inventory assets.
- However, there was a significant jump to 104.06 days in 2025, which may indicate excess inventory accumulation, reduced inventory turnover, or strategic stockpiling. This sudden increase could negatively impact liquidity and operational flexibility.

Days of Sales Outstanding (DSO):
- The DSO decreased from 52.90 days in 2021 to 46.58 days in 2023, reflecting an improvement in receivables collection efficiency and a shorter cash conversion cycle.
- In 2024, the DSO slightly increased to 49.40 days, possibly signaling some delays in receivables collection or changes in credit policy.
- The most notable change occurs in 2025 with the DSO rising sharply to 83.32 days, indicating a significant deterioration in receivables management, potentially leading to delayed cash inflows and increased working capital requirements.

Number of Days of Payables:
- The payables period decreased from 92.75 days in 2021 to 82.03 days in 2023, suggesting an improved or more aggressive approach to settling liabilities.
- An increase to 86.19 days in 2024 reflects a slight extension in paying suppliers, possibly indicating changes in payment terms or cash flow management strategies.
- The substantial increase to 104.63 days in 2025 represents a considerable extension in payables, which could be leveraged as a source of short-term financing but might also strain supplier relationships or indicate negotiating power shifts.

In summary, Amcor PLC’s activity ratios reveal a trend towards increased inventory holding and receivables days in 2025, coupled with an extension in payables days. These shifts suggest a period of operational adjustment, potential liquidity concerns, or strategic changes in working capital management, particularly notable in 2025 compared to prior years.

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Long-term

The analysis of Amcor PLC's long-term activity ratios reveals noteworthy trends over the specified period. The Fixed Asset Turnover ratio increased from 3.42 times on June 30, 2021, to 3.99 times on June 30, 2022, indicating an improved utilization of fixed assets in generating sales revenue. This upward movement suggests more efficient deployment of fixed assets, possibly achieved through better asset management or operational improvements. However, the ratio experienced a slight decline to 3.91 times by June 30, 2023, which may reflect a marginal decrease in fixed asset efficiency or increased asset base without a proportional increase in sales. Data beyond this date is unavailable, precluding further trend analysis.

In contrast, the Total Asset Turnover ratio demonstrates a steady upward trend from 0.75 in 2021 to 0.86 in 2023. This progression suggests an enhanced overall efficiency in utilizing the entire asset base to generate sales, indicating that the company has been increasingly effective in leveraging both fixed and current assets. Notably, the ratio declines to 0.83 in 2024, aligning closely with prior levels, which may imply a stabilization or slight slowdown in overall asset utilization. The significant drop to 0.40 projected for June 30, 2025, warrants particular attention, as it indicates a substantial decrease in total asset efficiency, potentially attributable to increased asset investments, a shift in business strategy, or operational challenges affecting asset productivity.

Overall, while Amcor PLC demonstrated improvements in fixed asset utilization from 2021 through 2023, the sharp decrease in total asset turnover forecasted for 2025 could signal changes in operational efficiency or asset management that merit further investigation.