Griffon Corporation (GFF)

Working capital turnover

Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Revenue (ttm) US$ in thousands 2,569,202 2,527,910 2,540,295 2,579,326 2,596,635 2,667,247 2,748,003 2,820,103 2,760,205 2,432,204 2,324,089 2,184,420 2,207,560 2,509,033 2,492,326 2,417,798 2,351,128 2,264,619 2,208,339 2,196,705
Total current assets US$ in thousands 929,476 966,399 1,007,170 962,606 980,591 1,131,240 1,214,570 1,182,760 1,214,670 1,342,150 1,650,090 1,354,400 1,368,680 1,226,860 1,191,740 1,144,330 1,106,030 987,950 1,003,720 945,954
Total current liabilities US$ in thousands 348,990 386,708 361,737 391,679 359,149 382,303 381,653 390,859 423,579 594,637 583,269 512,838 531,636 466,477 458,575 446,798 441,822 436,171 387,120 388,511
Working capital turnover 4.43 4.36 3.94 4.52 4.18 3.56 3.30 3.56 3.49 3.25 2.18 2.60 2.64 3.30 3.40 3.47 3.54 4.10 3.58 3.94

September 30, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $2,569,202K ÷ ($929,476K – $348,990K)
= 4.43

Working capital turnover is a financial ratio that measures how efficiently a company utilizes its working capital to generate sales revenue. A higher working capital turnover ratio indicates better efficiency in utilizing working capital to generate sales.

Analyzing the data provided for Griffon Corporation's working capital turnover over the past few years, we observe fluctuations in the ratio. In the most recent period, as of September 30, 2024, the working capital turnover ratio stands at 4.43, indicating that Griffon Corporation generated $4.43 in sales for each dollar invested in working capital during that period.

Looking at the trend over the past five quarters, we see some variability in the ratio, with values ranging from 2.18 to 4.52. The ratio has shown an overall increasing trend, indicating improved efficiency in utilizing working capital to generate sales revenue.

It is important to note that a high working capital turnover ratio can suggest effective management of working capital, but an excessively high ratio may also indicate that the company is not effectively utilizing its current assets to support growth or that it may be facing difficulties in meeting short-term obligations.

Overall, based on the trend observed in Griffon Corporation's working capital turnover ratio, the company appears to be efficiently managing its working capital to generate sales revenue, which is a positive indication of operational efficiency.