Neogen Corporation (NEOG)
Liquidity ratios
| Nov 30, 2024 | Aug 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 | 3.77 | 4.41 | 3.82 | 3.54 | 4.23 | 4.03 | 5.18 | 4.22 | 9.07 | 8.05 | 9.28 | 9.75 | 12.00 | 11.03 | 12.09 | 12.97 | 11.99 | 11.08 | 13.16 | 12.89 |
| Quick ratio | 2.01 | 2.35 | 2.17 | 2.16 | 2.73 | 2.74 | 3.08 | 2.75 | 6.58 | 10.50 | 12.28 | 13.08 | 16.11 | 14.52 | 15.68 | 16.77 | 16.19 | 14.56 | 10.44 | 10.29 |
| Cash ratio | 0.93 | 0.98 | 1.07 | 1.30 | 1.73 | 1.69 | 1.71 | 1.81 | 5.19 | 9.22 | 10.87 | 11.61 | 14.39 | 12.81 | 13.78 | 14.97 | 14.51 | 12.81 | 8.38 | 8.08 |
Neogen Corporation's liquidity ratios have displayed fluctuations over the period under review. The current ratio, which measures the company's ability to cover short-term liabilities with current assets, has experienced a gradual decline from 12.89 in November 2019 to 3.77 in November 2024. This suggests a potential deterioration in the company's short-term liquidity position.
Similarly, the quick ratio, which provides a more stringent assessment of liquidity by excluding inventory from current assets, has shown a decreasing trend from 10.29 in November 2019 to 2.01 in November 2024. This indicates a diminishing ability to meet immediate obligations without relying on the sale of inventory.
Moreover, the cash ratio, representing the most stringent liquidity measure by considering only cash and cash equivalents, has followed a downward trajectory from 8.08 in November 2019 to 0.93 in November 2024. This implies a decreasing capability to settle current liabilities using the most liquid assets.
Overall, the declining trend in Neogen Corporation's liquidity ratios indicates a potential weakening in its ability to meet short-term obligations with its current assets, particularly towards the end of the period. This could raise concerns about the company's ability to manage its short-term liquidity effectively and may warrant further investigation into its liquidity management strategies.
Additional liquidity measure
| Nov 30, 2024 | Aug 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 | 65.00 | 89.67 | 71.11 | 49.78 | 47.95 | 60.24 | 80.20 | 75.76 | 109.17 | 103.58 | 111.13 | 106.81 | 115.67 | 120.64 | 122.27 | 112.18 | 116.41 | 115.95 | 114.40 | 114.07 |
Neogen Corporation's cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, has shown some fluctuations over the past few years.
From November 2019 to February 2022, the cash conversion cycle ranged between 112.18 days and 122.27 days, indicating that the company took an average of around 114 to 122 days to convert its investments into cash.
However, from May 2022 onwards, there was a significant improvement in the cash conversion cycle for Neogen Corporation. The cycle decreased to as low as 47.95 days by August 2023, showing a substantial enhancement in the company's efficiency in converting its resources into cash.
Although there was a slight increase in the cash conversion cycle by the end of November 2024, the overall trend indicates that Neogen Corporation has managed to streamline its operations and improve its cash conversion efficiency significantly compared to the earlier periods.
This positive trend in the cash conversion cycle suggests that Neogen Corporation has been more effective in managing its working capital, which could lead to improved liquidity and financial performance in the future.