Group 1 Automotive Inc (GPI)
Liquidity ratios
| Dec 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.03 | 1.00 | 1.02 | 1.04 | 1.11 | 0.82 | 1.11 | 1.02 | 1.03 | 1.03 | 1.00 | 1.02 | 1.08 | 1.50 | 1.33 | 1.12 | 1.09 | 1.06 | 1.03 | 0.91 |
| Quick ratio | 0.01 | 0.02 | 0.02 | 0.02 | 0.02 | 0.02 | 0.01 | 0.01 | 0.02 | 0.01 | 0.02 | 0.01 | 0.01 | 0.28 | 0.16 | 0.05 | 0.05 | 0.04 | 0.04 | 0.01 |
| Cash ratio | 0.01 | 0.02 | 0.02 | 0.02 | 0.02 | 0.02 | 0.01 | 0.01 | 0.02 | 0.01 | 0.02 | 0.01 | 0.01 | 0.28 | 0.16 | 0.05 | 0.05 | 0.04 | 0.04 | 0.01 |
The liquidity ratios of Group 1 Automotive Inc provide insight into its ability to meet short-term obligations with its current assets.
- The current ratio has shown fluctuations over the years, ranging from a low of 0.82 on September 30, 2023, to a high of 1.50 on September 30, 2021. Overall, the company's current ratio has generally been above 1, indicating that it has more current assets than current liabilities to cover its short-term obligations.
- The quick ratio, which excludes inventory from current assets, also indicates the company's ability to meet its short-term liabilities. Group 1 Automotive Inc's quick ratio has generally been low, with values mostly below 0.05, suggesting that the company may have difficulty meeting its obligations without relying on inventory.
- The cash ratio, which is the most stringent liquidity measure, has also remained relatively low, with values around 0.01 to 0.28. This indicates that Group 1 Automotive Inc has limited cash reserves in comparison to its current liabilities.
Overall, while the current ratio of Group 1 Automotive Inc suggests a satisfactory ability to cover short-term obligations, the low quick and cash ratios indicate potential liquidity challenges, especially in terms of having enough cash readily available to meet immediate financial obligations. Management should monitor liquidity closely to ensure the company can withstand any unforeseen liquidity pressures.
Additional liquidity measure
| Dec 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 57.37 | 63.26 | 55.85 | 50.37 | 48.17 | 43.49 | 44.97 | 41.52 | 37.35 | 34.01 | 33.75 | 33.82 | 34.87 | 28.43 | 35.49 | 51.67 | 58.99 | 54.45 | 51.83 | 71.83 |
Group 1 Automotive Inc's cash conversion cycle has shown fluctuations over the time period from March 31, 2020, to December 31, 2024. The cash conversion cycle represents the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.
The trend in Group 1 Automotive Inc's cash conversion cycle indicates an overall decreasing trend from a high of 71.83 days on March 31, 2020, to a low of 57.37 days on December 31, 2024. A decreasing cash conversion cycle suggests that the company is more efficient in managing its working capital components such as inventory turnover, accounts receivable collection, and accounts payable management.
However, it is worth noting that there were some fluctuations in the cash conversion cycle over the period, indicating potential fluctuations in the company's working capital management efficiency. For example, there was a significant decrease in the cash conversion cycle from March 31, 2020, to September 30, 2021, which indicates an improvement in working capital management during this period. Subsequently, there was a slight increase in the cash conversion cycle towards December 31, 2024, suggesting potential challenges in maintaining the efficiency of working capital management.
Overall, Group 1 Automotive Inc should continue monitoring and improving its working capital processes to ensure efficient management of cash flows and optimize its cash conversion cycle for better financial performance.