AZZ Incorporated (AZZ)

Liquidity ratios

Feb 28, 2025 Nov 30, 2024 Aug 31, 2024 May 31, 2024 Feb 29, 2024 Nov 30, 2023 Aug 31, 2023 May 31, 2023 Feb 28, 2023 Nov 30, 2022 Aug 31, 2022 May 31, 2022 Feb 28, 2022 Nov 30, 2021 Aug 31, 2021 May 31, 2021 Feb 28, 2021 Nov 30, 2020 Aug 31, 2020 May 31, 2020
Current ratio 1.70 1.77 1.85 1.77 1.89 1.96 1.99 2.27 2.23 1.84 1.88 2.15 2.57 2.95 2.77 2.55 2.67 2.63 1.29 1.40
Quick ratio 0.01 0.01 0.01 0.05 0.02 0.04 0.01 0.02 0.02 0.01 0.03 0.30 0.10 0.17 0.13 0.09 0.13 0.16 0.06 0.11
Cash ratio 0.01 0.01 0.01 0.05 0.02 0.04 0.01 0.02 0.02 0.01 0.03 0.30 0.10 0.17 0.13 0.09 0.13 0.16 0.06 0.11

The liquidity ratios of AZZ Incorporated indicate its ability to meet short-term financial obligations. The current ratio, which measures the company's ability to cover its current liabilities with its current assets, shows a generally positive trend over the years, increasing from 1.40 on May 31, 2020, to 2.15 on May 31, 2022, before declining to 1.70 by February 28, 2025. The current ratio peaked at 2.95 on November 30, 2021, indicating a strong ability to meet short-term obligations at that time.

In contrast, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, shows a more volatile pattern. The quick ratio fluctuated significantly over the period, reaching a low of 0.01 on multiple occasions, such as August 31, 2022, and November 30, 2022. This implies that the company may have had challenges in meeting its immediate obligations without relying on inventory during those periods.

The cash ratio, which is the most conservative liquidity measure focusing solely on cash and cash equivalents to cover current liabilities, mirrors the trend observed in the quick ratio. It fluctuates between 0.01 and 0.30 over the years, indicating varying levels of cash availability relative to short-term obligations.

Overall, while the current ratio shows an improving trend in AZZ Incorporated's ability to cover short-term liabilities with current assets, the quick and cash ratios suggest fluctuations and potential challenges in meeting immediate obligations without considering inventory. Investors and stakeholders may need to consider all these liquidity ratios together to assess the company's overall liquidity position accurately.

Additional liquidity measure

Feb 28, 2025 Nov 30, 2024 Aug 31, 2024 May 31, 2024 Feb 29, 2024 Nov 30, 2023 Aug 31, 2023 May 31, 2023 Feb 28, 2023 Nov 30, 2022 Aug 31, 2022 May 31, 2022 Feb 28, 2022 Nov 30, 2021 Aug 31, 2021 May 31, 2021 Feb 28, 2021 Nov 30, 2020 Aug 31, 2020 May 31, 2020
Cash conversion cycle days 34.30 34.67 35.20 34.94 36.58 39.75 42.55 45.10 47.30 51.38 59.13 94.00 67.94 59.35 58.20 56.04 52.16 49.27 46.15 49.12

The cash conversion cycle of AZZ Incorporated has shown fluctuations over the financial periods analyzed. The trend indicates that the company's ability to convert its investments in inventory and accounts receivable back into cash has varied over time.

Initially, the cash conversion cycle was relatively stable, staying within the range of around 45 to 60 days. However, there was a notable increase in the cycle time, peaking at 94 days on May 31, 2022. This could indicate inefficiencies in managing inventory, collecting receivables, or both during that period.

Subsequently, there was a significant improvement in the cash conversion cycle, with a notable decrease to 34.30 days by February 28, 2025. This suggests that the company may have implemented more effective processes to manage its working capital, leading to a quicker turnaround in converting investments into cash.

In conclusion, the fluctuating cash conversion cycle of AZZ Incorporated highlights the importance of closely monitoring working capital management practices to optimize cash flow efficiency and overall financial performance.