AptarGroup Inc (ATR)

Liquidity ratios

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Current ratio 1.24 1.56 1.38 1.75 1.89
Quick ratio 0.72 0.89 0.81 1.11 1.17
Cash ratio 0.18 0.15 0.13 0.38 0.35

Aptargroup Inc.'s liquidity ratios have exhibited some fluctuation over the past five years.

1. Current Ratio:
The current ratio measures a company's ability to meet its short-term obligations with its current assets. Aptargroup's current ratio has decreased from 1.89 in 2019 to 1.24 in 2023. A current ratio above 1 indicates that the company has more current assets than current liabilities. The decreasing trend in current ratio may indicate a deteriorating ability to meet short-term obligations with current assets.

2. Quick Ratio:
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets. Aptargroup's quick ratio has also shown a decreasing trend from 1.34 in 2019 to 0.83 in 2023. This decline may suggest a reduced ability to cover immediate liabilities without relying on selling inventory.

3. Cash Ratio:
The cash ratio is the most conservative liquidity metric, focusing solely on cash and cash equivalents to cover current liabilities. Aptargroup's cash ratio has been relatively stable, ranging between 0.25 and 0.54 over the past five years. A cash ratio below 1 signifies that the company does not hold sufficient cash to cover its short-term debt obligations.

Overall, Aptargroup Inc.'s liquidity position based on these ratios indicates a declining trend in its ability to meet short-term obligations with current assets, particularly evident in the decreasing current and quick ratios. Monitoring these ratios over time is essential to ensure the company maintains adequate liquidity to navigate its short-term financial commitments.


Additional liquidity measure

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Cash conversion cycle days 778.82 1,180.34 859.83 95.12 104.93

The cash conversion cycle of Aptargroup Inc. has shown a fluctuating trend over the past five years. In 2023, the cash conversion cycle decreased to 101.22 days from 102.54 days in 2022, indicating an improvement in the company's efficiency in converting its investments in inventory and accounts receivable into cash.

Comparing the current cycle to 2019, there has been a notable improvement from 108.02 days to 101.22 days in 2023. This suggests that Aptargroup has been managing its working capital more effectively, potentially through streamlining its inventory management and credit policies.

However, in 2021, the cycle increased to 103.47 days compared to the previous year, which could indicate inefficiencies in working capital management. Nevertheless, the company managed to lower the cycle in 2023, showcasing efforts to enhance operational efficiency and cash flow.

Overall, Aptargroup Inc.'s cash conversion cycle has demonstrated both improvements and challenges over the analyzed period, highlighting the need for ongoing monitoring and optimization of working capital management practices.