Amcor PLC (AMCR)

An analysis of Amcor PLC's liquidity ratios over the period from September 2020 to June 2025 reveals a generally stable liquidity position with some fluctuations across different time points.

The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, remained relatively steady, oscillating within a narrow range. It fluctuated between a low of 1.15 in June 2022 and a high of 1.76 in September 2022. The ratio consistently stayed above 1, indicating that the company maintained a comfortable level of current assets relative to current liabilities. Notably, there was a significant increase in September 2022, which may suggest improved short-term asset management or a reduction in short-term liabilities during that period. The ratios towards the later periods generally ranged between 1.19 and 1.29, with a notable spike to 1.70 in March 2025, highlighting an improvement in liquidity or potential changes in asset composition.

The quick ratio, which excludes inventory to assess the company's immediate liquidity position, showed more variability. It was relatively stable between approximately 0.53 and 0.87 over most of the period, remaining below 1 at most points, which suggests a cautious stance with limited readily available assets outside of receivables and cash. The highest value of 1.02 was recorded in March 2025, indicating an increased ability to meet immediate obligations without relying on inventory sales. During earlier periods, the quick ratio hovered around 0.59 to 0.67, indicating moderate liquidity with reliance on inventories and receivables to cover liabilities.

The cash ratio, representing the most conservative measure of liquidity by focusing solely on cash and cash equivalents, was relatively low throughout the period, mostly ranging between 0.11 and 0.21. The lowest point was 0.11, observed in December 2023 and September 2024, reflecting limited cash holdings relative to current liabilities. A notable exception occurred in March 2025, where the ratio increased significantly to 0.52, implying a substantial improvement in cash reserves and an enhanced ability to meet immediate short-term obligations solely with cash.

Overall, Amcor PLC's liquidity ratios suggest a prudent liquidity management approach characterized by stable current and quick ratios, with notable periods of improvement, particularly in March 2025. The low but stable cash ratio indicates a reliance on other current assets to meet short-term liabilities, with some periods showing increased cash holdings, possibly in anticipation of strategic needs or operational adjustments. The fluctuations across ratios reflect varying short-term liquidity management strategies and possibly shifts in asset liquidations, working capital management, or operational cash flows.

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Additional liquidity measure

The analysis of Amcor PLC's cash conversion cycle (CCC) over the period from September 2020 to June 2025 reveals notable fluctuations, reflecting shifts in operational efficiency related to receivables management, inventory levels, and payable practices.

Initially, the CCC declined from 48.25 days in September 2020 to a low of approximately 28.82 days in June 2022, indicating a period of improved working capital efficiency—characterized by faster cash inflows and/or extended supplier credit. This reduction suggests effective management of receivables and inventory, as well as potentially favorable credit terms negotiated with suppliers.

However, subsequent periods show a rising trend, with the CCC increasing again to around 48.03 days in September 2024, and a significant spike to 82.75 days in June 2025. This substantial increase indicates a deterioration in working capital management, possibly due to longer receivable collection periods, higher inventory holdings, or shorter payable periods. The peak in June 2025 is particularly notable and may be associated with operational or strategic shifts affecting cash flow timing.

Overall, the data suggests that Amcor PLC experienced a period of operational efficiency improvement in the early to mid-2020s, followed by a reversal leading to extended cash cycles. The variations in the CCC underscore the importance of ongoing management of receivables, inventories, and payables to sustain optimal liquidity and working capital performance.