Phibro Animal Health Corporation (PAHC)

The liquidity ratios of Phibro Animal Health Corporation for the past five years reveal the company's ability to meet its short-term obligations and manage its cash resources effectively.

The current ratio has fluctuated between 2.87 in 2020 to 3.33 in 2023, with the latest ratio at 2.94 as of June 30, 2024. This ratio indicates that Phibro has maintained a healthy level of current assets relative to its current liabilities in recent years, although there was a slight dip in 2024 compared to the previous year.

The quick ratio has remained relatively stable around 1.39 for the past five years, suggesting that the company has a sufficient level of liquid assets to cover its immediate liabilities without relying too heavily on inventory. This indicates a consistent ability to meet short-term obligations using readily available assets.

The cash ratio, on the other hand, has fluctuated between 0.46 in 2023 to 0.58 in 2020, with the latest ratio at 0.56 as of June 30, 2024. This ratio reflects the company's ability to cover its current liabilities with its cash reserves alone. Although there has been some volatility, Phibro has generally maintained a reasonable cash position in relation to its short-term obligations over the years.

Overall, Phibro Animal Health Corporation has demonstrated satisfactory liquidity levels over the past five years, as evidenced by its current, quick, and cash ratios. The company appears to have managed its short-term financial obligations effectively while maintaining a reasonable level of cash reserves for unexpected needs.

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Additional liquidity measure

The cash conversion cycle of Phibro Animal Health Corporation has exhibited fluctuations over the past five years. The company's ability to convert its investments in raw materials, production, and inventory into cash has shown variability.

In the most recent year, ending June 30, 2024, the cash conversion cycle stood at 129.06 days, showing an improvement compared to the previous year. This may indicate more efficient management of working capital and faster conversion of inventory and receivables into cash.

In the year ending June 30, 2023, the cash conversion cycle was at its highest level over the period, reaching 143.35 days. This indicates a potential delay in converting investments into cash flow, which could have been due to various factors such as slower inventory turnover or longer collection periods from customers.

In contrast, the cash conversion cycle in the year ending June 30, 2022, improved to 133.42 days, suggesting enhanced efficiency in working capital management compared to the prior year.

However, the cash conversion cycle saw a significant increase in the year ending June 30, 2021, reaching 160.41 days, which might have raised concerns about the company's liquidity position and operational efficiency during that period.

Looking back to June 30, 2020, the cash conversion cycle was at 145.39 days, indicating a slightly longer period required to convert investments into cash, though not as prolonged as in 2021.

Overall, while there have been fluctuations in Phibro Animal Health Corporation's cash conversion cycle over the past five years, it appears that the company has managed to improve its efficiency in converting investments into cash in the most recent year, possibly through enhanced working capital management practices.