Grocery Outlet Holding Corp (GO)
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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.35 | 1.34 | 1.37 | 1.42 | 1.67 | 1.63 | 1.65 | 1.90 | 1.86 | 1.88 | 1.88 | 1.85 | 1.64 | 1.76 | 1.61 |
| Quick ratio | 0.35 | 0.47 | 0.32 | 0.27 | 0.42 | 0.37 | 0.32 | 0.57 | 0.63 | 0.68 | 0.59 | 0.48 | 0.45 | 0.30 | 0.38 |
| Cash ratio | 0.30 | 0.41 | 0.27 | 0.27 | 0.37 | 0.37 | 0.32 | 0.57 | 0.59 | 0.68 | 0.59 | 0.48 | 0.45 | 0.30 | 0.38 |
The liquidity ratios of Grocery Outlet Holding Corp indicate varying levels of short-term financial health and ability to meet its current obligations. The current ratio has shown a general decreasing trend over the past year, from a high of 1.94 in March 2022 to 1.35 in December 2023. This may suggest a potential weakening ability to cover short-term liabilities with current assets.
The quick ratio, a more stringent measure that excludes inventory, also fluctuated significantly over the periods, ranging from a low of 0.13 in December 2020 to a high of 0.84 in June 2020. The decreasing trend from March 2023 to December 2023, falling from 0.59 to 0.35, indicates potential difficulties in meeting immediate obligations without relying on inventory.
The cash ratio, which highlights the company’s ability to cover current liabilities with cash and cash equivalents, has similar fluctuations over the periods but generally follows the trend of the quick ratio. The company’s ability to cover liabilities with just cash has seen a decrease in the latter half of 2023, potentially signaling a need for improved cash management practices.
Overall, while Grocery Outlet Holding Corp has maintained current assets exceeding current liabilities, the declining trends in both quick and cash ratios suggest a need for the company to closely monitor its liquidity position and ensure efficient management of its short-term financial obligations.
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 16.07 | 15.24 | 19.93 | 34.96 | 22.36 | 36.31 | 36.51 | 35.47 | 20.07 | 30.03 | 30.42 | 29.69 | 29.94 | 32.40 | 30.51 |
The cash conversion cycle is a measure of the time it takes for a company to convert its investments in inventory back into cash. A lower cash conversion cycle indicates a more efficient management of working capital.
Based on the data provided for Grocery Outlet Holding Corp, we can see fluctuations in the cash conversion cycle over the past several quarters. In the most recent quarter ending on December 31, 2023, the cash conversion cycle was 16.07 days, which was lower compared to the previous quarter's figure of 15.24 days.
Overall, the company has shown some variability in its cash conversion cycle in recent quarters, with some periods exhibiting shorter cycles and others longer. The fluctuation in the cash conversion cycle could be due to changes in the company's inventory management practices, accounts receivable collection efficiency, or accounts payable policies.
It would be essential for Grocery Outlet Holding Corp to analyze the factors contributing to these fluctuations and work towards maintaining a consistent and efficient cash conversion cycle to ensure optimal management of working capital and liquidity.