Ball Corporation (BALL)

Ball Corporation's liquidity ratios have shown a declining trend over the past few years.

The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, decreased from 1.05 in 2020 to 0.78 in 2022, before slightly recovering to 1.00 in 2024. This indicates that Ball Corporation may have had some challenges in meeting its short-term obligations, but the situation improved towards the end of the period.

The quick ratio, also known as the acid-test ratio, gives a more stringent measure of liquidity by excluding inventory from current assets. Ball Corporation's quick ratio plummeted from 0.31 in 2020 to 0.08 in 2022, before experiencing a slight increase to 0.18 in 2024. This suggests that the company's ability to cover its short-term liabilities with its most liquid assets deteriorated significantly but saw some improvement in the later years.

The cash ratio, which is the most conservative liquidity measure, representing the company's ability to cover its current liabilities with cash and cash equivalents, mirrored the trend of the quick ratio. It dropped from 0.31 in 2020 to 0.08 in 2022 and then increased to 0.18 in 2024.

Overall, Ball Corporation faced liquidity challenges during the analyzed period, as indicated by the decreasing trend in the current, quick, and cash ratios. However, the slight improvements towards the end of the period suggest that the company may have taken steps to enhance its liquidity position.

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Additional liquidity measure

The cash conversion cycle of Ball Corporation has shown some fluctuations over the years. Starting at 52.97 days on December 31, 2020, it increased to 59.10 days by December 31, 2021. Subsequently, the cycle continued to lengthen reaching 62.30 days by December 31, 2022. However, there was a notable improvement in efficiency by December 31, 2023, as the cycle decreased to 50.10 days. Nevertheless, by December 31, 2024, the cycle slightly increased to 57.63 days. Overall, the company should monitor and manage its working capital components closely to optimize its cash conversion cycle for improved liquidity and operational effectiveness.