Amcor PLC (AMCR)

The liquidity position of Amcor PLC over the period from June 30, 2021, to June 30, 2025, demonstrates a generally stable but slightly fluctuating trend across its key ratios.

The current ratio, which measures the company's ability to meet its short-term obligations with its current assets, commenced at 1.21 in June 2021. It declined marginally to 1.15 in June 2022, then experienced a slight increase to 1.19 in June 2023 before decreasing again to 1.17 in June 2024. By June 2025, the current ratio rebounded to 1.21, returning to its initial level. Overall, this ratio remains above 1 throughout the period, indicating that the company maintained sufficient current assets to cover current liabilities, with modest fluctuations suggesting stable liquidity management.

The quick ratio, which refines the current ratio by excluding inventories to focus on more liquid assets, showed a decrease from 0.63 in June 2021 to 0.53 in June 2022. This was followed by a slight recovery to 0.58 in June 2023, maintaining similar levels of 0.57 in June 2024, and increasing modestly to 0.61 in June 2025. The quick ratio consistently remains below 1, implying that a significant portion of current assets is tied up in inventory or less liquid items. Nevertheless, the relatively stable upward trend towards the end of the period suggests a gradual improvement in liquidity without immediate concerns.

The cash ratio, which is an even more conservative measure of liquidity focusing solely on cash and cash equivalents, declined from 0.20 in June 2021 to 0.15 in June 2022. It then increased slightly to 0.16 in June 2023, before decreasing again to 0.14 in June 2024, and further declining to 0.12 in June 2025. The persistently low cash ratio indicates that the company's immediate liquidity in cash or cash equivalents is limited relative to short-term liabilities. The downward trend signifies a decreasing buffer of liquid cash available for immediate obligations over time.

In summary, Amcor PLC exhibits stable current liquidity ratios with a consistent capacity to cover short-term liabilities. However, the diminishing cash ratio highlights potential challenges in maintaining high levels of cash or equivalent assets for immediate obligations. The ratios collectively suggest a reliance on other current assets, such as inventory or receivables, to sustain liquidity, with a cautious trend towards reduced immediate cash buffers over the analyzed period.

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Additional liquidity measure

The cash conversion cycle (CCC) of Amcor PLC has exhibited notable fluctuations over the period from June 30, 2021, to June 30, 2025. As of June 30, 2021, the CCC was 31.89 days, indicating that the company took approximately 32 days to convert investments in inventory and other resources into cash flows from sales. This duration decreased slightly in the subsequent year, reaching 28.82 days as of June 30, 2022, suggesting an improvement in the efficiency of inventory management and receivables collection during that period.

However, by June 30, 2023, the CCC increased marginally to 32.03 days, returning to a level similar to the previous year. This indicates a stabilization in the company's cash conversion efficiency around that time. The following year, the CCC experienced a slight decrease to 31.06 days as of June 30, 2024, which reflects a minor improvement in cash conversion timeframes.

Contrastingly, the most significant change occurred in the forecasted or reported figure for June 30, 2025, where the CCC sharply rose to 82.75 days. This substantial increase suggests a marked deterioration in the company's ability to efficiently convert inventory and receivables into cash. Such a dramatic elongation of the cycle could point to issues such as extended receivables collection terms, increased inventory holding periods, or other operational inefficiencies.

Overall, the observed trend indicates a relatively stable cash conversion cycle from 2021 through 2024, with only minor fluctuations around a range of approximately 29 to 32 days. The abrupt increase to over 82 days in 2025 signals a potential concern that warrants further investigation into the operational and credit management practices of Amcor PLC during this period.