Graphic Packaging Holding Company (GPK)

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 1.10 1.17 1.36 1.62 1.40 1.30 1.34 1.37 1.22 1.31 1.29 1.45 1.09 1.17 1.27 1.86 1.51 1.62 1.70 1.80
Quick ratio 0.39 0.42 0.50 0.59 0.53 0.48 0.53 0.54 0.50 0.47 0.47 0.53 0.45 0.46 0.48 0.70 0.55 0.59 0.64 0.69
Cash ratio 0.06 0.06 0.06 0.07 0.08 0.04 0.05 0.06 0.08 0.04 0.06 0.09 0.10 0.03 0.05 0.11 0.13 0.04 0.06 0.06

The liquidity ratios of Graphic Packaging Holding Co show varying levels of liquidity over the past eight quarters.

The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has fluctuated between 1.10 and 1.62 over the period analyzed. The current ratio hit its peak in Q1 2023 at 1.62, indicating that the company had $1.62 in current assets for every $1 in current liabilities. However, the current ratio decreased in subsequent quarters, falling to 1.10 in Q4 2023, which may suggest potential difficulties in meeting short-term obligations as current assets decreased relative to current liabilities.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also exhibited fluctuations, ranging from 0.42 to 0.64. The quick ratio showed the lowest level of liquidity in Q4 2023 at 0.42, indicating that the company may have difficulties meeting immediate obligations without relying on inventory.

The cash ratio, which measures the company's ability to cover immediate liabilities with cash and cash equivalents, hovered around 0.10 throughout the period. This indicates that Graphic Packaging Holding Co has maintained a consistent ability to cover its short-term obligations with cash on hand, albeit at a relatively low level.

Overall, the liquidity ratios of the company suggest that while Graphic Packaging Holding Co has generally maintained a solid ability to meet its short-term obligations, there have been fluctuations in liquidity levels that may warrant further monitoring to ensure continued financial stability and ability to cover obligations as they come due.

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 61.58 68.25 66.71 64.40 54.86 60.88 66.12 68.34 57.94 51.43 48.38 54.30 56.64 70.72 76.31 73.45 57.25 67.11 71.13 72.14

The cash conversion cycle of Graphic Packaging Holding Co has shown fluctuations over the past eight quarters. The company's cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory into cash flows from sales, has ranged from a low of 57.15 days in Q4 2022 to a high of 72.62 days in Q3 2023.

In general, a shorter cash conversion cycle is preferable as it indicates that the company is able to quickly convert its inventory into sales and subsequently into cash. Conversely, a longer cash conversion cycle may suggest inefficiencies in the company's operations or challenges in collecting payment for goods sold.

From the data provided, it appears that the cash conversion cycle increased from Q4 2022 to Q3 2023 before slightly decreasing in Q4 2023. This trend may indicate potential challenges in managing inventory, collecting receivables, or extending payment terms to suppliers in recent quarters.

Overall, the company should continue to monitor its cash conversion cycle closely and identify opportunities to streamline operations and improve working capital management in order to enhance its cash flow efficiency.