Gibraltar Industries Inc (ROCK)

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 2.56 2.09 2.07 2.01 2.05 1.62 1.58 1.79 1.97 1.91 1.74 1.69 1.56 1.61 1.39 1.36 1.41 1.79 1.73 1.64
Quick ratio 1.72 1.42 1.54 1.43 1.44 1.09 0.97 0.99 1.09 1.05 0.96 0.91 0.87 0.98 0.84 0.85 0.76 1.42 1.31 1.17
Cash ratio 1.06 0.75 0.63 0.56 0.44 0.27 0.06 0.03 0.08 0.08 0.06 0.05 0.04 0.05 0.06 0.08 0.11 0.67 0.50 0.39

Based on the provided data, let's analyze Gibraltar Industries Inc liquidity ratios:

1. Current Ratio:
- The current ratio measures the company's ability to pay its short-term obligations with its current assets.
- Gibraltar Industries Inc's current ratio fluctuated over the periods analyzed, ranging from a low of 1.36 on March 31, 2021, to a high of 2.56 on December 31, 2024.
- Overall, the current ratio showed an increasing trend from 2021 to 2024, indicating an improvement in the company's short-term liquidity position.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets.
- Gibraltar Industries Inc's quick ratio ranged from a low of 0.76 on December 31, 2020, to a high of 1.72 on December 31, 2024.
- Similar to the current ratio, the quick ratio showed variability but generally improved over the period, reflecting enhanced short-term liquidity.

3. Cash Ratio:
- The cash ratio is the most conservative liquidity ratio, focusing only on cash and cash equivalents to cover short-term liabilities.
- Gibraltar Industries Inc's cash ratio increased significantly from 0.03 on March 31, 2023, to 1.06 on December 31, 2024.
- The steep rise in the cash ratio indicates the company's enhanced ability to meet its short-term obligations with cash reserves, strengthening its liquidity position.

In conclusion, Gibraltar Industries Inc demonstrated an overall improvement in its liquidity ratios from 2021 to 2024, with increasing current, quick, and cash ratios. This upward trend suggests that the company managed its short-term financial obligations more effectively and had sufficient liquid assets to support its operations and growth.

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 55.14 47.16 67.01 64.97 69.69 61.57 72.80 76.33 78.75 86.95 85.04 75.01 65.78 71.37 54.59 53.70 52.86 44.39 52.62 60.07

The cash conversion cycle, which represents the time it takes for a company to convert its investment in inventory and other resources into cash inflows from sales, fluctuated for Gibraltar Industries Inc over the reported periods.

The average cash conversion cycle for the years presented was approximately 63 days, indicating the company takes around two months to complete a full operating cycle from acquiring inventory to receiving cash from sales.

The cycle showed some variability, with the shortest cycle of 44.39 days reported on September 30, 2020, indicating efficient management of inventory and receivables, while the longest cycle of 86.95 days was recorded on September 30, 2022, possibly suggesting delays in collection from customers or inventory management challenges during that period.

Overall, monitoring the cash conversion cycle is crucial for evaluating how efficiently the company manages its working capital, as a shorter cycle indicates better liquidity management and capital efficiency.