Avery Dennison Corp (AVY)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 215,000 | 167,200 | 162,700 | 252,300 | 253,700 |
| Short-term investments | US$ in thousands | 37,800 | 31,300 | 33,400 | 32,600 | 30,600 |
| Receivables | US$ in thousands | 1,414,900 | 1,374,400 | 1,424,500 | 1,235,200 | 1,212,200 |
| Total current liabilities | US$ in thousands | 2,699,500 | 2,799,800 | 2,547,900 | 1,926,000 | 2,253,800 |
| Quick ratio | 0.62 | 0.56 | 0.64 | 0.79 | 0.66 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($215,000K
+ $37,800K
+ $1,414,900K)
÷ $2,699,500K
= 0.62
The quick ratio of Avery Dennison Corp has exhibited fluctuations over the past five years, ranging from 0.56 to 0.79. The ratio measures the company's ability to cover its short-term liabilities with its most liquid assets, excluding inventory. A higher quick ratio is generally considered more favorable, indicating a stronger ability to meet short-term obligations without relying on selling inventory.
The declining trend observed from 2020 to 2022, with the quick ratio decreasing from 0.79 to 0.56, may raise concerns about the company's liquidity position during this period. However, the improvement seen in 2023, with the ratio increasing to 0.62, suggests a positive shift in the company's ability to meet short-term obligations more effectively.
Overall, while the quick ratio of Avery Dennison Corp has shown some volatility in recent years, the recent uptick in 2023 indicates a potential strengthening of the company's liquidity position compared to the previous year. It is important to further investigate the factors contributing to these fluctuations to assess the company's financial health accurately.
Peer comparison
Dec 31, 2023