Commercial Metals Company (CMC)
Activity ratios
Short-term
Turnover ratios
| 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 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 4.80 | 5.42 | 5.49 | 6.76 | 6.83 | 7.06 | 6.52 | 5.49 | 6.09 | 6.12 | 6.57 | 6.79 | 6.73 | 7.84 | 8.14 | 8.02 | 7.56 | 8.49 | 7.93 | 6.56 |
| Receivables turnover | 7.48 | 7.02 | 7.06 | 7.41 | 7.43 | 7.27 | 6.71 | 6.37 | 6.76 | 6.62 | 6.02 | 5.63 | 6.18 | 6.25 | 6.17 | 6.32 | 6.07 | 6.12 | 5.68 | 5.46 |
| Payables turnover | 15.01 | 16.21 | 15.59 | 20.25 | 18.49 | 19.64 | 17.81 | 14.99 | 16.80 | 15.43 | 13.63 | 16.62 | 16.90 | 20.26 | 19.13 | 22.45 | 19.63 | 22.62 | 19.07 | 19.03 |
| Working capital turnover | 3.43 | 3.47 | 3.81 | 4.03 | 4.24 | 4.36 | 4.37 | 4.12 | 2.93 | 3.83 | 3.79 | 3.63 | 3.61 | 3.49 | 3.70 | 3.67 | 4.06 | 4.17 | 4.17 | 3.93 |
Commercial Metals Company's inventory turnover has shown some variability over the observation period, ranging from a low of 4.80 to a high of 8.49. This ratio indicates how efficiently the company is managing its inventory levels and converting them into sales. Generally, a higher inventory turnover is preferred as it suggests that the company is selling goods quickly and not holding excess inventory. The trend for Commercial Metals Company shows a relatively stable performance in managing its inventory turnover, with some fluctuations over time.
The receivables turnover ratio for Commercial Metals Company has also exhibited some variability, ranging from 5.46 to 7.48. This ratio measures how effectively the company is collecting its accounts receivable from customers. A higher receivables turnover ratio indicates that the company is collecting payments quickly. The trend for Commercial Metals Company suggests a somewhat stable performance in collecting its receivables over the observation period.
In terms of payables turnover, Commercial Metals Company has shown fluctuations with a range of 13.63 to 22.62. The payables turnover ratio measures how efficiently the company is paying its suppliers and other short-term obligations. A higher payables turnover ratio indicates that the company is paying its bills quickly, which can be beneficial for managing working capital. The trend for Commercial Metals Company indicates some variability in its management of payables turnover over time.
Lastly, the working capital turnover ratio for Commercial Metals Company has shown a range of 2.93 to 4.37. This ratio reflects how effectively the company is utilizing its working capital to generate sales. A higher working capital turnover ratio suggests that the company is efficiently using its resources to drive revenue. The trend for Commercial Metals Company in terms of working capital turnover shows some fluctuations but overall a relatively stable performance in utilizing its working capital to generate sales.
Average number of days
| 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 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 76.05 | 67.36 | 66.53 | 53.98 | 53.43 | 51.67 | 55.99 | 66.50 | 59.93 | 59.65 | 55.59 | 53.78 | 54.21 | 46.55 | 44.85 | 45.54 | 48.26 | 42.98 | 46.01 | 55.65 |
| Days of sales outstanding (DSO) | days | 48.81 | 52.01 | 51.68 | 49.24 | 49.12 | 50.19 | 54.40 | 57.34 | 53.98 | 55.14 | 60.63 | 64.78 | 59.06 | 58.41 | 59.20 | 57.77 | 60.17 | 59.60 | 64.21 | 66.80 |
| Number of days of payables | days | 24.32 | 22.52 | 23.41 | 18.02 | 19.74 | 18.58 | 20.49 | 24.35 | 21.72 | 23.65 | 26.79 | 21.96 | 21.60 | 18.02 | 19.08 | 16.26 | 18.60 | 16.13 | 19.14 | 19.18 |
Commercial Metals Company's activity ratios provide insights into how efficiently the company manages its inventory, collects receivables, and pays its suppliers.
1. Days of Inventory on Hand (DOH):
- The trend in DOH shows an increase over the latest three periods, indicating that inventory is being held for a longer time before being sold.
- The highest DOH was recorded at 76.05 days on Feb 29, 2024, indicating potential issues with inventory management efficiency.
- It is important for the company to monitor and potentially reduce DOH to avoid excess inventory holding costs and obsolescence.
2. Days of Sales Outstanding (DSO):
- DSO shows a fluctuating trend over the periods, with some periods showing an increase and others a decrease.
- The latest DSO of 48.81 days on Feb 29, 2024, suggests that the company is collecting receivables relatively faster compared to previous periods.
- A lower DSO indicates efficient management of accounts receivable, improving cash flow and liquidity for the company.
3. Number of Days of Payables:
- The trend in the number of days of payables also shows fluctuations over the periods analyzed.
- The latest period recorded a number of days of payables of 24.32 days on Feb 29, 2024, indicating that the company takes about 24 days on average to pay its suppliers.
- A longer period of payables may suggest favorable credit terms or cash flow management, but the company needs to ensure it does not strain supplier relationships by delaying payments excessively.
Overall, monitoring and managing these activity ratios are crucial for Commercial Metals Company to optimize working capital management, enhance liquidity, and improve overall operational efficiency.
Long-term
| 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 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 3.38 | 3.52 | 3.64 | 4.07 | 4.35 | 4.61 | 4.77 | 4.68 | 4.73 | 4.57 | 4.25 | 3.87 | 3.55 | 3.51 | 3.46 | 3.68 | 3.83 | 3.91 | 3.85 | 3.76 |
| Total asset turnover | 1.26 | 1.28 | 1.32 | 1.41 | 1.41 | 1.41 | 1.46 | 1.39 | 1.42 | 1.53 | 1.43 | 1.38 | 1.36 | 1.35 | 1.33 | 1.41 | 1.49 | 1.55 | 1.54 | 1.47 |
The Fixed Asset Turnover ratio for Commercial Metals Company has been relatively stable over the analyzed period, ranging from 3.38 to 4.77. This ratio indicates that for every dollar invested in fixed assets, the company is generating between $3.38 and $4.77 in sales. The consistency in this ratio suggests that the company is efficiently utilizing its fixed assets to generate revenue.
The Total Asset Turnover ratio shows a similar trend, fluctuating between 1.26 and 1.55 during the same period. This ratio reflects the company's ability to generate sales in relation to its total assets. The higher the ratio, the more effectively the company is utilizing its assets to generate revenue.
Overall, both ratios demonstrate that Commercial Metals Company is effectively leveraging its assets to generate sales, with the Fixed Asset Turnover ratio showing a more specific focus on the efficiency of the company's fixed assets. The stable performance of these ratios over the analyzed period indicates that the company has a consistent approach to asset utilization in driving its business operations.