Avery Dennison Corp (AVY)

The current ratio for Avery Dennison Corp has exhibited a declining trend from 1.25 in 2020 to 1.08 in 2024. Although the ratio remained above 1 in all years, indicating the company's ability to meet short-term obligations, the decreasing trend suggests a potential deterioration in liquidity over the years.

Similarly, the quick ratio and cash ratio also demonstrate a consistent decline over the same period, reflecting a decrease in the company's ability to cover its current liabilities with its most liquid assets. The quick ratio declined from 0.15 in 2020 to 0.11 in 2024, while the cash ratio decreased from 0.15 in 2020 to 0.11 in 2024.

Overall, the liquidity ratios of Avery Dennison Corp indicate a weakening liquidity position over the years, which may warrant further examination of the company's financial management and working capital strategies to ensure its ability to meet short-term obligations efficiently.

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Additional liquidity measure

The cash conversion cycle of Avery Dennison Corp has shown a trend of increase over the years, going from 51.86 days as of December 31, 2020, to 57.35 days as of December 31, 2024. This indicates that the company is taking longer to convert its investments in inventory into cash. A longer cash conversion cycle may suggest issues with inventory management, collection of receivables, or the payment of payables. It is essential for Avery Dennison Corp to closely monitor and manage its working capital components to improve efficiency and maintain healthy cash flow in the future.