Commercial Metals Company (CMC)
Liquidity ratios
| 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 | Feb 29, 2020 | Nov 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 3.94 | 4.24 | 4.19 | 4.12 | 3.73 | 3.68 | 3.07 | 2.99 | 2.54 | 2.48 | 4.23 | 3.12 | 2.79 | 2.95 | 3.27 | 3.54 | 2.97 | 3.42 | 3.21 | 3.35 |
| Quick ratio | 2.42 | 2.46 | 2.30 | 3.02 | 2.17 | 2.02 | 1.75 | 1.73 | 1.50 | 1.25 | 2.42 | 1.69 | 1.64 | 1.78 | 1.87 | 2.18 | 1.91 | 2.14 | 1.84 | 1.97 |
| Cash ratio | 1.03 | 0.91 | 0.84 | 1.47 | 0.70 | 0.56 | 0.57 | 0.54 | 0.50 | 0.30 | 1.03 | 0.47 | 0.51 | 0.52 | 0.54 | 0.76 | 0.73 | 0.74 | 0.36 | 0.37 |
Commercial Metals Company has demonstrated strong liquidity over the past few quarters, as indicated by consistently high current ratios above 2. This suggests that the company has more than enough current assets to cover its short-term liabilities. The current ratio has been consistently improving, reaching a high of 4.24 in May 2024.
Additionally, the quick ratio, which excludes inventory from current assets, also paints a positive picture of liquidity for Commercial Metals Company. The company has maintained quick ratios above 1, indicating that it has an adequate level of liquid assets to meet its short-term obligations without relying on inventory turnover.
The cash ratio for Commercial Metals Company has also generally remained healthy, with values consistently above 1. This indicates that the company holds sufficient cash and cash equivalents to cover its current liabilities and potentially take advantage of investment opportunities or weather unexpected financial challenges.
Overall, based on the analysis of liquidity ratios, Commercial Metals Company appears to have a strong financial position and the ability to meet its short-term obligations comfortably.
Additional liquidity measure
| 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 | Feb 29, 2020 | Nov 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 84.77 | 105.49 | 100.53 | 96.86 | 94.80 | 85.19 | 82.80 | 83.28 | 89.90 | 99.49 | 92.20 | 91.14 | 89.43 | 96.59 | 91.67 | 86.94 | 84.97 | 87.05 | 89.83 | 86.45 |
The cash conversion cycle of Commercial Metals Company has shown some fluctuations over the past few quarters. The company's ability to convert its resources into cash has varied, with the cycle ranging from 82.80 days to 105.49 days. Generally, a shorter cash conversion cycle is preferable as it indicates that the company is efficiently managing its inventory, accounts receivable, and accounts payable.
In the most recent quarter, ending August 31, 2024, the cash conversion cycle stood at 84.77 days, indicating that Commercial Metals Company takes around 84.77 days to convert its investments in raw materials into cash from sales. This suggests that the company's efficiency in managing its working capital may have improved compared to the previous quarter.
It is worth noting that a decreasing trend in the cash conversion cycle is generally positive as it indicates a more efficient use of resources and quicker cash generation. Conversely, an increasing trend may suggest inefficiencies in managing working capital, which can lead to liquidity issues in the future if not addressed.
Overall, analyzing the cash conversion cycle over time provides valuable insights into Commercial Metals Company's operational efficiency and financial health.