GMS Inc (GMS)
Liquidity ratios
| Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | Jul 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.17 | 2.40 | 2.32 | 2.37 | 2.19 | 2.53 | 2.35 | 2.30 | 2.06 | 2.37 | 2.14 | 2.06 | 1.96 | 2.38 | 2.32 | 2.39 | 2.03 | 2.25 | 2.21 | 2.29 |
| Quick ratio | 1.50 | 1.64 | 1.67 | 1.61 | 1.49 | 1.76 | 1.68 | 1.56 | 1.36 | 1.52 | 1.44 | 1.38 | 1.43 | 1.52 | 1.51 | 1.59 | 1.30 | 1.36 | 1.37 | 1.41 |
| Cash ratio | 0.22 | 0.15 | 0.12 | 0.13 | 0.23 | 0.30 | 0.19 | 0.16 | 0.15 | 0.15 | 0.09 | 0.08 | 0.30 | 0.40 | 0.31 | 0.38 | 0.44 | 0.12 | 0.10 | 0.07 |
The current ratio of GMS Inc has shown a general trend of fluctuation over the past few years, ranging from 2.06 to 2.53. This indicates the company's ability to meet its short-term obligations with its current assets. Overall, the current ratio has been relatively stable, with the latest value standing at 2.17 as of April 30, 2024.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also displayed variability, ranging from 1.30 to 1.76. The quick ratio as of April 30, 2024, stands at 1.50, suggesting that GMS Inc may face some challenges in meeting its immediate liabilities without relying on inventory.
The cash ratio, reflecting the most conservative measure of liquidity, has shown significant variability over the periods, ranging from 0.07 to 0.44. As of April 30, 2024, the cash ratio is 0.22, indicating that the company may have limited cash reserves to cover its current liabilities if needed.
Overall, while the current ratio shows a healthy ability to cover short-term obligations, the downward trend in the quick ratio and the volatility in the cash ratio signal potential liquidity concerns for GMS Inc that may require further monitoring and management attention.
Additional liquidity measure
| Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | Jul 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 76.08 | 82.51 | 84.67 | 82.29 | 75.72 | 82.70 | 87.01 | 86.41 | 81.68 | 96.16 | 101.41 | 93.78 | 74.36 | 76.87 | 74.35 | 67.42 | 53.43 | 70.86 | 77.36 | 81.34 |
The cash conversion cycle of GMS Inc has displayed fluctuations over the past several reporting periods. The cash conversion cycle represents the number of days it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
Analyzing the data provided, we observe that the cash conversion cycle ranged from a low of 53.43 days in July 2020 to a high of 101.41 days in October 2021. Generally, a shorter cash conversion cycle is preferable as it indicates that the company is efficient in managing its working capital and converting its assets into cash quickly.
GMS Inc's cash conversion cycle has shown some volatility, with fluctuations in the range of days across the periods. This may indicate variations in the company's inventory management, accounts receivable collection, and accounts payable practices.
Overall, it would be beneficial for GMS Inc to focus on optimizing its cash conversion cycle by streamlining its operations, improving inventory turnover, accelerating accounts receivable collections, and efficiently managing its accounts payable to enhance liquidity and overall financial health.