Amcor PLC (AMCR)

The analysis of Amcor PLC's solvency ratios, based on the provided data, indicates a unique financial structure over the period from June 30, 2021, through June 30, 2025.

The debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio are consistently reported as zero across all observed dates. This persistent zero valuation suggests that the company has not reported any observable debt obligations or leverage related to liabilities, or that debt data has not been incorporated into the ratios. Such a scenario typically indicates an absence of long-term or short-term debt, implying that Amcor PLC may have used a financing structure that relies primarily on equity without leveraging debt. Alternatively, it could suggest the ratios are calculated based on data that excludes debt, possibly due to reporting or classification conventions.

In contrast, the financial leverage ratio presents a more dynamic picture. It shows a decreasing trend from 3.61 in 2021 to 3.16 in 2025, with a brief increase in 2022 and 2023 (to 4.27 and 4.22 respectively). The decline in this ratio over time suggests a reduction in the degree of financial leverage employed by the firm. Since financial leverage ratios typically measure the proportion of total assets financed through debt relative to equity, the decreasing trend points to a potential conservative shift in capital structure or a reduction in financed assets, assuming the ratio is correctly calculated and accurately reflects the company's leverage.

Overall, the combination of zero debt ratios and a declining financial leverage ratio suggests that Amcor PLC maintains a low or negligible debt profile, with decreasing reliance on borrowed funds over the analyzed period. This indicates a conservative approach to leverage, potentially reducing financial risk but also possibly impacting the company's return on equity if not complemented by strategic investment or growth.

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Coverage ratios

The interest coverage ratio for Amcor PLC has demonstrated a declining trend over the specified period from June 30, 2021, to June 30, 2025. Specifically, the ratio decreased from 8.80 times in 2021 to 8.30 times in 2022. This slight reduction indicates a marginal decline in the company's ability to meet interest obligations from operating earnings. The decline becomes more pronounced in subsequent years, with the ratio falling to 5.31 in 2023, reflecting a significant decrease in the company's capacity to cover interest expenses through its earnings before interest and taxes (EBIT). The downward trajectory continues into 2024 and 2025, with ratios of 3.61 and 2.64, respectively. These figures suggest a substantial reduction in financial cushion, indicating that Amcor PLC’s profitability or cash flow from operations relative to interest obligations is weakening. The trend warrants close monitoring, as a lower interest coverage ratio may imply increased financial risk and potential challenges in servicing debt commitments if the trend persists.