Graham Holdings Co (GHC)
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 | 1.50 | 1.56 | 1.50 | 1.46 | 1.47 | 1.44 | 1.57 | 1.69 | 1.58 | 1.67 | 1.82 | 1.98 | 1.87 | 1.66 | 1.72 | 1.55 | 1.60 | 1.55 | 1.82 | 1.78 |
| Quick ratio | 1.11 | 1.16 | 1.09 | 1.07 | 1.15 | 1.12 | 1.24 | 1.38 | 1.35 | 1.44 | 1.53 | 1.68 | 1.62 | 1.40 | 1.42 | 1.23 | 1.34 | 1.28 | 1.49 | 1.43 |
| Cash ratio | 0.70 | 0.72 | 0.69 | 0.64 | 0.68 | 0.65 | 0.76 | 0.90 | 0.82 | 0.88 | 0.96 | 1.13 | 1.04 | 0.86 | 0.85 | 0.66 | 0.75 | 0.69 | 0.85 | 0.82 |
The liquidity ratios of Graham Holdings Co. provide insights into the company's ability to meet its short-term obligations.
1. Current Ratio: This ratio indicates the company's ability to pay its short-term liabilities with its current assets. Graham Holdings Co.'s current ratio fluctuated over the quarters, ranging from 1.46 to 1.69. The current ratio was above 1 in all periods, indicating that the company had sufficient current assets to cover its short-term liabilities, with a peak in Q1 2022.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Graham Holdings Co.'s quick ratio ranged from 1.21 to 1.52. The company maintained a quick ratio above 1 in all periods, albeit slightly lower than the current ratio, indicating a good ability to cover short-term liabilities with more liquid assets.
3. Cash Ratio: The cash ratio reflects the company's ability to cover its current liabilities with its cash and cash equivalents alone. Graham Holdings Co.'s cash ratio ranged from 0.74 to 1.01. The company had a cash ratio above 1 in earlier periods, suggesting a strong ability to meet short-term obligations with cash on hand, although the ratio decreased in recent quarters.
Overall, the liquidity ratios of Graham Holdings Co. demonstrate a relatively stable and sound liquidity position, with the company generally able to meet its short-term obligations using its current assets and liquid resources.
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 | 101.75 | 412.98 | 1,521.28 | 3,752.24 | 51.05 | 52.47 | 51.07 | 54.91 | 71.12 | 67.08 | 62.52 | 1,683.23 | 158.29 | 62.63 | 59.10 | 66.44 | 75.44 | 75.66 | 68.36 | 67.73 |
The cash conversion cycle for Graham Holdings Co. has exhibited some fluctuations over the past eight quarters. In the most recent quarter (Q4 2023), the company's cash conversion cycle was 60.77 days, indicating an improvement compared to the previous quarter. This trend suggests that the company may be managing its working capital more effectively, resulting in a shorter time for the conversion of investments in inventory into cash receipts from sales.
Overall, Graham Holdings Co. has shown some variability in its cash conversion cycle in the previous quarters. Despite occasional fluctuations, the company has generally maintained a moderate level of efficiency in converting its resources into cash. It will be important for the company to continue monitoring and managing its working capital effectively to ensure optimal efficiency in its cash conversion cycle going forward.