Phibro Animal Health Corporation (PAHC)

The liquidity ratios of Phibro Animal Health Corporation over the analyzed period from June 30, 2021, to June 30, 2025, demonstrate a generally stable but gradually declining trend in the company's short-term liquidity position.

The current ratio, which measures the company's ability to meet its short-term obligations with its current assets, fluctuated within a narrow range. It was highest on June 30, 2023, at 3.33, indicating a strong liquidity cushion, but experienced subsequent declines to 2.94 in 2024 and further to 2.76 in 2025. Despite these fluctuations, the ratio remains above 2.5 in the latest period, suggesting that the company maintains sufficient current assets relative to current liabilities, although the downward trend may signal a slight deterioration in liquidity buffer.

The quick ratio, which offers a more stringent view by excluding inventories from current assets, remained relatively stable from June 30, 2021, to June 30, 2024, with values oscillating around 1.35 to 1.39. However, a notable decrease to 1.04 in June 2025 reflects a reduction in highly liquid assets relative to current liabilities, indicating a potential tightening of liquidity that warrants attention.

The cash ratio, representing the most conservative measure among the three, exhibited modest declines over the years. Beginning at 0.57 in June 2021, it decreased to 0.46 in June 2023, then experienced a slight increase to 0.56 in 2024 before falling sharply to 0.26 in June 2025. The significant decrease in the most recent period suggests a substantial reduction in the company's immediate cash availability to cover current liabilities, raising concerns about short-term cash liquidity.

Overall, while the company has historically maintained favorable liquidity ratios, recent years, especially into 2025, indicate a trend toward lower liquidity levels. This trend highlights the importance of monitoring the company's cash management and short-term asset adequacy to ensure continued ability to meet its short-term financial obligations.

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Additional liquidity measure

The cash conversion cycle (CCC) of Phibro Animal Health Corporation has experienced fluctuations over the analyzed period from June 30, 2021, to June 30, 2025. Specifically, the CCC was 160.41 days as of June 30, 2021, then decreased to 155.39 days by June 30, 2022, indicating an improvement in the company's liquidity management and efficiency in converting inventory and receivables into cash. However, this positive trend reversed in the subsequent year, with the cycle lengthening to 170.42 days as of June 30, 2023, suggesting potential delays in receivables collection, inventory management, or other operational bottlenecks.

Following this peak, the company demonstrated a notable improvement during the fiscal year ending June 30, 2024, reducing the CCC to 154.20 days. This decline reflects enhanced operational efficiency or better cash management strategies during that period. Nonetheless, the most recent data as of June 30, 2025, indicates a significant increase in the CCC to 188.90 days. This elongation suggests a deterioration in the company's ability to quickly convert its investments in inventory and receivables into cash, potentially due to increased collection periods, larger inventory holdings, or extended payables.

Overall, the trend demonstrates periods of both improvement and setback in managing working capital, with the most recent measurement indicating a decline in overall operational efficiency concerning cash flow conversion.