Central Garden & Pet Company (CENT)

Liquidity ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Current ratio 3.47 3.73 3.51 3.47 3.58 3.34 3.16 2.85 2.98 2.96 3.29 2.62 3.51 3.46 3.81 3.81 3.84 4.69 4.84 4.52
Quick ratio 1.44 1.79 1.66 1.31 0.99 1.19 1.36 1.18 1.25 1.55 1.98 1.26 2.11 2.37 2.59 2.22 2.08 2.86 3.02 2.63
Cash ratio 0.69 1.07 0.67 0.13 0.21 0.38 0.38 0.09 0.58 0.82 1.01 0.07 1.38 1.48 1.29 0.93 1.30 1.79 1.60 1.10

Central Garden & Pet Company's liquidity ratios have shown fluctuations over the analyzed periods. The current ratio, which measures the company's ability to cover short-term liabilities with current assets, has generally been strong, ranging from 2.85 to 3.73, with the latest value at 3.47 as of Dec 31, 2023.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also exhibited variability, showing a range between 0.99 and 2.86. The most recent value of 1.44 as of Dec 31, 2023, indicates that the company may have an adequate ability to meet its short-term obligations using its most liquid assets.

In terms of the cash ratio, which is an even stricter measure of liquidity focusing solely on cash and cash equivalents, the company has shown a wide range from 0.07 to 1.79. The value stood at 0.69 as of Dec 31, 2023, suggesting a moderate ability to cover current liabilities with cash on hand.

Overall, Central Garden & Pet Company exhibits solid liquidity positions, as indicated by its current, quick, and cash ratios. However, managing fluctuations in these ratios effectively is crucial to ensure stable financial health and meet short-term obligations efficiently.

Additional liquidity measure

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Cash conversion cycle days 126.45 111.97 133.78 150.87 133.91 125.86 129.40 134.83 106.85 94.92 107.44 136.32 104.32 98.10 121.56 138.96 120.62 114.87 134.33 154.00

The cash conversion cycle of Central Garden & Pet Company has exhibited fluctuations over the past several quarters, indicating varying efficiency in managing the company's working capital.

The cash conversion cycle is calculated by adding the days inventory outstanding (DIO), days sales outstanding (DSO), and days payable outstanding (DPO). A longer cash conversion cycle suggests that the company is taking longer to convert its investments in inventory into cash from sales, which may impact its liquidity and cash flow.

The company's cash conversion cycle ranged from a low of 94.92 days to a high of 154.00 days over the analyzed period. It peaked at 154.00 days in Q4 2019, indicating a prolonged period for the company to convert its resources into cash. This could signify potential challenges in efficiently managing inventory levels, collecting receivables, or delaying payments to suppliers.

Subsequently, there was a trend of improvement as the cash conversion cycle decreased to 94.92 days in Q3 2021, highlighting enhanced working capital management during that period. However, the cycle lengthened again in Q1 2022 and surpassed 150 days in Q1 2023, indicating a potential reversion to less efficient working capital practices.

Overall, Central Garden & Pet Company should focus on optimizing its inventory turnover, accelerating accounts receivable collections, and delaying payments to suppliers to shorten its cash conversion cycle and enhance its overall liquidity position.