Smurfit WestRock plc (SW)

The current ratio for Smurfit WestRock plc has shown a generally increasing trend over the past four years, indicating an improvement in the company's short-term liquidity position. As of December 31, 2023, the current ratio stood at 1.51, suggesting that the company had $1.51 in current assets for every $1 in current liabilities. This indicates that Smurfit WestRock plc has sufficient current assets to cover its short-term obligations.

On the other hand, the quick ratio, also known as the acid-test ratio, has fluctuated over the same period. While it remained relatively low at 0.26 in 2022 and 2021, the ratio improved to 0.33 in 2023, indicating an increase in the company's ability to meet its immediate liabilities using its most liquid assets. However, the quick ratio is still significantly lower than the current ratio, which may suggest that a significant portion of Smurfit WestRock plc's current assets are tied up in less liquid assets such as inventory.

The cash ratio, which represents the most conservative measure of liquidity, has remained consistent over the past four years, with a ratio of 0.33 as of December 31, 2023. This ratio indicates that Smurfit WestRock plc had $0.33 in cash and cash equivalents for every $1 in current liabilities, highlighting the company's ability to cover its short-term obligations with cash on hand.

Overall, while the current ratio has shown improvement, the quick ratio remains relatively low, indicating that a significant portion of current assets may not be easily convertible into cash. Smurfit WestRock plc's consistent cash ratio suggests that the company has maintained a strong cash position to meet its short-term financial obligations.

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Additional liquidity measure

The cash conversion cycle of Smurfit WestRock plc has shown a fluctuating trend over the past four years. In 2023, the company's cash conversion cycle decreased to 50.52 days from 51.76 days in 2022, indicating an improvement in the efficiency of its working capital management. Despite this improvement, the cycle remains slightly longer compared to 2020 when it was 50.59 days.

Overall, Smurfit WestRock plc has been able to optimize its cash conversion cycle over the years, albeit with some variations. This indicates that the company has been managing its cash flow from operations, accounts receivable, and accounts payable effectively. However, there may still be opportunities for the company to further streamline its working capital management processes to potentially shorten the cash conversion cycle and improve liquidity management.