Berry Global Group Inc (BERY)

In analyzing Berry Global Group Inc's liquidity ratios, we can observe the following trends:

Current Ratio:
The current ratio measures the company's ability to meet its short-term obligations with its short-term assets. Berry Global's current ratio has decreased over the years, from 1.84 in 2019 to 1.67 in 2023. This indicates a slight decline in the company's ability to cover its short-term liabilities with its current assets.

Quick Ratio:
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Berry Global's quick ratio has also experienced a declining trend, from 1.19 in 2019 to 1.10 in 2023. This suggests a decrease in the company's immediate ability to meet its short-term obligations without relying on inventory.

Cash Ratio:
The cash ratio measures the company's ability to cover its short-term liabilities with its cash and cash equivalents. Berry Global's cash ratio has fluctuated over the years, with a decrease from 0.44 in 2019 to 0.52 in 2023. Despite the fluctuations, the company's cash ratio remains relatively low, indicating a limited ability to fulfill short-term obligations with available cash.

Overall, the liquidity ratios for Berry Global Group Inc demonstrate a downward trend, suggesting a potential decrease in the company's short-term liquidity position. It is important for the company to closely monitor and manage its liquidity to ensure it can meet its financial obligations as they come due.

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Additional liquidity measure

The cash conversion cycle (CCC) of Berry Global Group Inc has displayed fluctuations over the past five years. In the most recent fiscal year ending on September 30, 2023, the CCC stood at 46.21 days, indicating a slight increase from the previous year's figure of 44.96 days. This suggests that the company took slightly longer to convert its investments in inventory and receivables into cash during the latest fiscal period.

When compared to the CCC of 45.21 days in 2021 and the higher figure of 51.80 days in 2020, it is evident that the company's management of its inventory and receivables has been relatively stable. Additionally, there has been a notable improvement from the CCC of 71.03 days in 2019, signifying that the company has become more efficient in its cash conversion cycle over the past few years.

Overall, while the CCC has seen fluctuations, the recent trend suggests that Berry Global Group Inc has been managing its working capital more effectively, leading to a shorter cash conversion cycle, which is indicative of improved liquidity and operational efficiency.