Griffon Corporation (GFF)

Griffon Corporation's liquidity ratios have shown some fluctuations over the past five years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has ranged from 2.50 to 2.87 during this period. A higher current ratio is generally favorable as it indicates a stronger ability to meet short-term liabilities. Griffon Corporation's current ratio has generally been above 2, indicating that the company has sufficient current assets to cover its current liabilities.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Griffon Corporation's quick ratio has ranged from 1.05 to 1.29, which is relatively stable over the five-year period. A quick ratio above 1 suggests that the company can meet its short-term obligations without relying on selling inventory, which is a positive sign of liquidity.

The cash ratio, which is the most conservative liquidity ratio as it only considers cash and cash equivalents as current assets, has varied from 0.28 to 0.50 for Griffon Corporation. A higher cash ratio indicates a greater ability to cover short-term liabilities with readily available cash. Griffon Corporation's cash ratio has fluctuated, with the lowest value in 2022 and the highest in 2020.

Overall, Griffon Corporation has maintained healthy liquidity levels over the past five years, as indicated by its current, quick, and cash ratios. The company's ability to cover its short-term obligations has generally been strong, with fluctuations in the ratios reflecting changes in the composition of its current assets. Monitoring liquidity ratios is important for assessing a company's short-term financial health and its ability to withstand economic uncertainties.

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Additional liquidity measure

The cash conversion cycle for Griffon Corporation has shown some fluctuations over the past five years. In 2024, the cash conversion cycle improved to 91.54 days from 97.03 days in 2023, indicating that the company managed its cash flow more efficiently. However, compared to 2020 and 2021, the cycle has lengthened, which might suggest a potential slowdown in the company's cash conversion process. It is important for Griffon Corporation to closely monitor and manage its cash conversion cycle to ensure optimal utilization of resources and maintain healthy cash flows.