Amcor PLC (AMCR)
Activity ratios
Short-term
Turnover ratios
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.35 | 6.69 | 5.63 | 6.08 | 5.42 |
| Receivables turnover | 7.19 | 7.79 | 7.44 | 6.84 | 7.72 |
| Payables turnover | 5.00 | 5.18 | 4.47 | 4.71 | 4.57 |
| Working capital turnover | 18.85 | 17.55 | 19.20 | 13.83 | 22.22 |
Amcor PLC has shown consistent efficiency in managing its inventory turnover over the past five years, with the ratio fluctuating around 6 times per year. This indicates that the company effectively sells and replenishes its inventory, ensuring optimal use of resources.
In terms of receivables turnover, the company has maintained a relatively stable performance, collecting payments from customers approximately 7 times a year. This suggests that their credit policy is effective, resulting in timely collection of accounts receivable.
Amcor PLC has also demonstrated efficiency in managing its payables turnover, with the ratio hovering around 5 times per year. This indicates that the company efficiently pays its suppliers, leveraging credit terms to optimize cash flow and working capital management.
The working capital turnover of Amcor PLC has shown variability over the years, but generally, the company has been able to effectively utilize its working capital to generate sales. The ratio peaked in 2020, indicating a more efficient use of resources to drive revenue.
Overall, Amcor PLC's activity ratios reflect a consistent level of efficiency in managing inventory, receivables, payables, and working capital to support its operations and financial performance.
Average number of days
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 57.48 | 54.60 | 64.81 | 60.00 | 67.33 |
| Days of sales outstanding (DSO) | days | 50.77 | 46.87 | 49.04 | 53.40 | 47.31 |
| Number of days of payables | days | 73.02 | 70.50 | 81.65 | 77.57 | 79.79 |
The activity ratios of Amcor PLC over the past five years reflect the efficiency of the company's operations in managing its inventory, receivables, and payables.
1. Days of Inventory on Hand (DOH):
- The trend in the Days of Inventory on Hand (DOH) shows a fluctuating pattern, with the company holding inventory for an average of around 60 days. This indicates that Amcor PLC has been able to manage its inventory levels relatively efficiently over the years, with a slight increase in 2022 compared to 2023 and 2024.
2. Days of Sales Outstanding (DSO):
- The Days of Sales Outstanding (DSO) has also shown variability, ranging from around 46 to 53 days. This ratio reflects the average number of days it takes for the company to collect revenue after making a sale. Amcor PLC has maintained its DSO within a reasonable range, indicating that it has been effective in managing its accounts receivable.
3. Number of Days of Payables:
- The Number of Days of Payables highlights the average number of days it takes for the company to pay its suppliers. Amcor PLC has consistently taken around 70 to 80 days to settle its payables, with a slight decrease in 2024 compared to the previous years. This suggests that the company has been able to extend its payment periods to suppliers, potentially improving its cash flow management.
In conclusion, Amcor PLC's activity ratios indicate a reasonable level of efficiency in managing its inventory, receivables, and payables over the past five years. The company has maintained stable trends in these ratios, reflecting effective operational performance.
Long-term
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.58 | 3.94 | 3.95 | 3.39 | 3.45 |
| Total asset turnover | 0.80 | 0.86 | 0.83 | 0.74 | 0.76 |
The fixed asset turnover ratio for Amcor PLC has shown a slight decline over the past five years, with a current value of 3.58 in 2024 compared to 3.94 in 2023. This ratio indicates that the company generated $3.58 in sales revenue for every dollar invested in fixed assets in 2024. While there has been some fluctuation, the overall trend suggests that the company may be becoming slightly less efficient in utilizing its fixed assets to generate sales.
On the other hand, the total asset turnover ratio for Amcor PLC has also exhibited variability but has generally improved over the same period, reaching 0.80 in 2024 compared to 0.76 in 2020. This ratio signifies that the company generated $0.80 in sales for every dollar of total assets in 2024. The increasing trend in total asset turnover indicates that the company has been more effective in utilizing its total assets to generate sales over the years.
Overall, while the fixed asset turnover for Amcor PLC has shown a declining trend, the total asset turnover has been on the rise. This suggests that the company may be diversifying its asset base or implementing strategies to improve overall asset utilization efficiency, offsetting the slight decline in fixed asset turnover. Further analysis into the company's asset management practices and investment decisions may provide insights into these contrasting trends.