Griffon Corporation (GFF)

Cash conversion cycle

		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
Days of inventory on hand (DOH)	days	67.12	67.46	69.29	66.32	70.53	63.76	64.18	76.15	79.13	113.66	113.42	91.31	80.46	102.02	98.22	92.86	68.77	66.99	76.82	78.48
Days of sales outstanding (DSO)	days	44.43	46.26	50.26	42.40	43.92	49.18	51.29	45.38	47.82	64.48	80.48	55.82	48.74	52.81	58.46	48.09	54.04	57.94	55.38	45.29
Number of days of payables	days	18.83	24.52	22.34	21.34	16.22	17.49	17.80	18.90	23.03	34.03	37.49	41.88	44.25	51.76	52.13	49.64	37.06	35.54	38.01	36.97
Cash conversion cycle	days	92.73	89.20	97.21	87.37	98.22	95.46	97.67	102.63	103.92	144.11	156.41	105.25	84.95	103.07	104.55	91.31	85.76	89.39	94.18	86.80

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 67.12 + 44.43 – 18.83
= 92.73

The cash conversion cycle of Griffon Corporation has shown fluctuations over the past few quarters. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash inflows.

Looking at the data, we can see that the cash conversion cycle has ranged from a low of 84.95 days to a high of 156.41 days over the last several quarters. A longer cash conversion cycle indicates that the company takes more time to sell its inventory and collect cash from its customers, which may tie up resources and impact liquidity.

The trend shows that there have been periods of both improvement and deterioration in the cash conversion cycle. For example, there was a significant increase in the cycle from the third quarter of 2022 to the second quarter of 2023, where it reached a peak of 156.41 days before gradually decreasing in subsequent quarters.

Overall, management should closely monitor and analyze the components of the cash conversion cycle, such as inventory turnover, accounts receivable collection period, and accounts payable payment period, to identify areas for efficiency improvements and better cash management practices.