Graham Holdings Co (GHC)

Activity ratios

Short-term

Turnover 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
Inventory turnover 2.92 0.51 0.12 0.04 -0.03 -0.55 -0.36 -0.23 -0.10 -0.10 -0.07 0.23 0.49 -0.21 -0.39 -0.66 -0.92 -0.46 -0.40 -0.57
Receivables turnover 8.75 8.35 9.48 8.29 7.15 6.96 7.15 6.65 5.13 5.44 5.84 5.57 5.23 5.83 6.18 5.49 4.84 4.82 5.34 5.39
Payables turnover 5.61 1.03 0.23 0.08 -0.06 -0.98 -0.45 -0.36 -0.11 -0.10 -0.08 — 0.56 — — — — — — —
Working capital turnover 7.11 6.66 7.54 7.77 7.27 7.42 6.02 4.68 4.69 4.53 4.06 3.13 3.48 4.75 4.89 5.81 4.72 5.24 4.17 4.21

Activity ratios provide insights into how efficiently a company is managing its operating assets and liabilities to generate sales.

1. Inventory turnover: Graham Holdings Co. has maintained relatively stable inventory turnover ratios ranging from 10.44 to 14.42 over the past eight quarters. This indicates that the company efficiently manages its inventory levels, with higher turnover ratios suggesting faster sales of inventory.

2. Receivables turnover: The company's receivables turnover ratios have shown fluctuations, ranging from 6.36 to 8.96 over the same period. A higher receivables turnover ratio indicates that Graham Holdings Co. is collecting its accounts receivable more frequently, which is important for maintaining cash flow.

3. Payables turnover: The payables turnover ratios have also varied, ranging from 16.46 to 22.53. A higher payables turnover ratio suggests that the company is paying its suppliers more frequently, potentially benefiting from any available discounts and managing its cash flow effectively.

4. Working capital turnover: Graham Holdings Co.'s working capital turnover ratios have generally been stable, ranging from 4.68 to 7.86. This ratio measures how effectively the company utilizes its working capital to generate sales, with higher ratios indicating more efficient utilization of assets.

In conclusion, Graham Holdings Co. appears to be effectively managing its operating assets and liabilities based on its activity ratios, contributing to the company's overall operational efficiency and financial performance.

Average number of days

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
Days of inventory on hand (DOH) days 125.07 722.31 3,098.53 8,122.03 — — — — — — — 1,617.74 741.46 — — — — — — —
Days of sales outstanding (DSO) days 41.70 43.71 38.49 44.02 51.05 52.47 51.07 54.91 71.12 67.08 62.52 65.50 69.73 62.63 59.10 66.44 75.44 75.66 68.36 67.73
Number of days of payables days 65.01 353.04 1,615.74 4,413.81 — — — — — — — — 652.90 — — — — — — —

To analyze Graham Holdings Co.'s activity ratios, we will focus on the following metrics:

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows an increasing pattern from Q1 2022 through Q4 2023, indicating that inventory levels are taking longer to turn into sales.
- The average DOH has increased from approximately 26 days in Q1 2022 to around 33.5 days in Q4 2023.
- This suggests that the company may be experiencing challenges in managing its inventory efficiently, potentially leading to higher carrying costs and increased risk of obsolescence.

2. Days of Sales Outstanding (DSO):
- DSO fluctuates over the quarters but shows a general decreasing trend from Q1 2022 through Q4 2023.
- The average DSO has decreased from approximately 54 days in Q1 2022 to around 44.7 days in Q4 2023.
- A lower DSO indicates that the company is collecting its accounts receivable more quickly, which is a positive sign of effective credit and collection policies.

3. Number of Days of Payables:
- The days of payables have been relatively stable over the quarters, with minor fluctuations within a narrow range.
- The average days of payables hover around 17.5 days during the observed period.
- This stability suggests that the company has been consistent in managing its payment obligations to suppliers.

Overall, the analysis of Graham Holdings Co.'s activity ratios indicates that while the company has shown improvements in managing its accounts receivable (DSO), there may be room for enhancement in inventory management to reduce the Days of Inventory on Hand and optimize working capital efficiency.

Long-term

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
Fixed asset turnover 7.86 7.97 8.22 7.88 7.72 7.90 7.90 7.42 6.82 6.69 8.03 7.57 7.60 7.56 7.67 7.77 7.62 7.71 8.54 8.54
Total asset turnover 0.61 0.64 0.64 0.61 0.59 0.51 0.49 0.46 0.43 0.46 0.46 0.44 0.45 0.49 0.51 0.53 0.49 0.52 0.54 0.53

Graham Holdings Co.'s fixed asset turnover ratio has been relatively stable over the past eight quarters, with values ranging from 7.42 to 8.24. This indicates that the company is efficient in generating sales revenue from its fixed assets, such as property, plant, and equipment.

On the other hand, the total asset turnover ratio has shown a gradual improvement over the same period, increasing from 0.46 in Q1 2022 to 0.64 in Q3 2023. This suggests that the company has been more effective in utilizing all its assets, both fixed and current, to generate sales.

Overall, the trends in both fixed asset turnover and total asset turnover ratios indicate that Graham Holdings Co. has been effectively utilizing its assets to drive revenue generation and optimize its operations over the examined period.