Granite Construction Incorporated (GVA)

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 1.66 1.56 1.68 1.51 1.60 1.60 1.72 1.72 1.69 1.52 1.60 1.70 1.71 1.51 1.49 1.45 1.54 1.59 1.60 1.61
Quick ratio 0.70 0.41 0.37 0.54 0.44 0.50 0.49 0.58 0.65 0.46 0.41 0.60 0.55 0.60 0.56 0.64 0.66 0.59 0.33 0.54
Cash ratio 0.70 0.41 0.37 0.54 0.44 0.50 0.49 0.58 0.65 0.46 0.41 0.60 0.55 0.60 0.56 0.64 0.66 0.59 0.33 0.54

Granite Construction Incorporated's liquidity ratios, as reflected by the current ratio, have shown a generally stable trend over the past few years, with a range between 1.45 and 1.72. The current ratio measures the company's ability to cover its short-term liabilities with its current assets, and an above 1 ratio is typically considered healthy.

In contrast, the quick ratio, which excludes inventory from current assets, has fluctuated more significantly for Granite Construction Inc. The quick ratio hovered between 0.33 and 0.70 over the same period, indicating a more volatile liquidity position when compared to the current ratio. A quick ratio below 1 may signal potential issues in meeting short-term obligations without relying on selling inventory.

The cash ratio, which is the most conservative liquidity ratio as it only considers cash and cash equivalents, also displayed fluctuations between 0.33 and 0.70. This ratio provides insight into a company's ability to cover its current liabilities with its most liquid assets. A higher cash ratio implies a stronger ability to settle short-term obligations, but may also indicate a potential underutilization of cash resources.

Overall, while Granite Construction Inc. maintains a current ratio consistently above 1, indicating a reasonable short-term liquidity position, the fluctuating quick and cash ratios suggest variations in the composition of the company's current assets and potential shifts in liquidity management strategies over the analyzed period. It would be beneficial to further investigate the factors contributing to these fluctuations to ensure adequate liquidity management in the future.


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 11.49 11.43 13.07 13.33 12.18 11.34 11.58 12.76 11.44 10.96 10.39 9.30 7.47 8.73 9.99 9.84 9.34 12.90 13.01 12.17

Granite Construction Incorporated's cash conversion cycle has shown fluctuations over the period from March 31, 2020, to December 31, 2024. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

The trend in Granite Construction Incorporated's cash conversion cycle is as follows:
- The cycle was around 12.17 days as of March 31, 2020, and increased to 13.01 days by June 30, 2020.
- Subsequently, it decreased to 9.34 days by December 31, 2020, marking an improvement in the efficiency of the company's operations.
- Over the following quarters, the cash conversion cycle remained relatively stable, between 9.30 and 11.58 days, indicating reasonable management of working capital.
- By December 31, 2023, the cycle increased to 12.18 days, potentially signaling a slight delay in the conversion of investments to cash flows.
- As of December 31, 2024, the cash conversion cycle stood at 11.49 days, showing a slight decrease compared to the previous period.

Overall, Granite Construction Incorporated has experienced fluctuations in its cash conversion cycle over the analyzed period. It is essential for the company to monitor and manage its working capital efficiently to ensure a healthy cash conversion cycle and sustainable financial performance.