WW Grainger Inc (GWW)

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 2.49 2.59 2.30 2.19 2.88 2.85 2.78 2.70 2.48 2.63 2.58 2.55 2.62 2.58 2.55 2.57 2.72 2.97 3.54 3.28
Quick ratio 0.45 0.61 0.32 0.32 0.36 0.32 0.27 0.24 0.16 0.18 0.15 0.21 0.16 0.21 0.34 0.37 0.41 0.60 1.15 0.99
Cash ratio 0.45 0.61 0.32 0.32 0.36 0.32 0.27 0.24 0.16 0.18 0.15 0.21 0.16 0.21 0.34 0.37 0.41 0.60 1.15 0.99

WW Grainger Inc's liquidity ratios have shown some fluctuations over the past few years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has generally been above 2, indicating a healthy level of liquidity. However, there was a slight decrease in the current ratio from March 31, 2024, to June 30, 2024.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. This ratio has also fluctuated over the years, with a notable increase from December 31, 2024, to September 30, 2024. The quick ratio has generally been below 1, suggesting that the company may have difficulty meeting its short-term obligations without relying on inventory.

The cash ratio, which is the most conservative liquidity ratio as it only includes cash and cash equivalents in the numerator, has followed a similar trend to the quick ratio. The cash ratio has been relatively low, indicating that WW Grainger Inc may have limited ability to cover its short-term liabilities with its cash resources alone.

Overall, while WW Grainger Inc has maintained a current ratio above 2, signaling adequate liquidity in the short term, the lower quick and cash ratios suggest that the company may need to manage its working capital more efficiently to enhance its liquidity position.

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 80.85 77.00 77.83 78.77 82.86 81.42 83.53 85.87 87.68 82.26 81.72 82.11 82.22 80.38 78.55 79.71 83.68 87.68 84.59 81.14

The cash conversion cycle (CCC) of WW Grainger Inc has shown fluctuations over the reported periods, ranging from a high of 87.68 days on September 30, 2020, to a low of 77.00 days on September 30, 2024. The CCC measures the average time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales.

Overall, a lower CCC indicates better efficiency in managing working capital as it reflects quicker turnover of inventory, collection of receivables, and payment of payables. WW Grainger Inc's CCC has exhibited a decreasing trend from 2020 to 2024, suggesting improvements in its cash conversion efficiency.

The company's CCC peaked in late 2020 and early 2021 before gradually declining, hitting a low in mid-2024. This trend implies that WW Grainger Inc has been more effective in managing its cash flow, possibly by minimizing inventory holding periods, streamlining receivables collection, and optimizing payment cycles.

Analyzing the CCC alongside other financial metrics and industry benchmarks can provide a more holistic assessment of WW Grainger Inc's working capital management and overall operational efficiency. It is essential for investors and stakeholders to monitor these trends to evaluate the company's financial health and performance over time.