Neogen Corporation (NEOG)
Quick ratio
| May 31, 2025 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 129,004 | 127,705 | 140,231 | 120,477 | 170,611 | 161,437 | 205,765 | 178,832 | 163,240 | 67,134 | 100,000 | 347,711 | 381,051 | 378,439 | 389,249 | 400,880 | 381,087 | 353,347 | 390,765 | 367,486 |
| Short-term investments | US$ in thousands | 0 | 0 | 0 | 317 | 325 | 7,010 | 24,501 | 60,424 | 82,329 | 116,080 | 176,338 | 240,613 | 336,578 | 335,560 | 338,130 | 329,597 | 305,485 | 279,865 | 276,898 | 306,539 |
| Receivables | US$ in thousands | 153,384 | 160,068 | 164,086 | 167,639 | 173,005 | 173,592 | 150,498 | 137,669 | 153,253 | 146,393 | 142,711 | 93,112 | 99,674 | 92,978 | 92,498 | 87,291 | 91,823 | 87,241 | 79,931 | 77,685 |
| Total current liabilities | US$ in thousands | 174,011 | 141,200 | 151,195 | 122,689 | 154,323 | 157,844 | 176,612 | 138,130 | 145,472 | 107,155 | 152,558 | 67,004 | 77,844 | 64,403 | 61,419 | 50,762 | 53,599 | 45,942 | 44,587 | 46,442 |
| Quick ratio | 1.62 | 2.04 | 2.01 | 2.35 | 2.23 | 2.17 | 2.16 | 2.73 | 2.74 | 3.08 | 2.75 | 10.17 | 10.50 | 12.53 | 13.35 | 16.11 | 14.52 | 15.68 | 16.77 | 16.19 |
May 31, 2025 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($129,004K
+ $0K
+ $153,384K)
÷ $174,011K
= 1.62
The analysis of Neogen Corporation's quick ratio over the specified periods from August 2020 through May 2025 indicates significant fluctuations, reflecting changes in the company's liquidity position. Initially, the quick ratio was notably high, surpassing 16 in August 2020 and remaining above 14 throughout much of 2020 and into the first half of 2021. This suggests that the company maintained a very strong liquidity buffer, with readily available short-term assets exceeding current liabilities by a substantial margin.
Starting from the second half of 2021, a downward trend in the quick ratio is observed. Notably, the ratio declined from above 16 in August 2021 to approximately 13.35 in November 2021, and continued decreasing into 2022, reaching approximately 10.50 in May 2022 and further dropping to around 10.17 in August 2022. This steady decline indicates a diminishing liquidity cushion, possibly due to changes in the composition of current assets, such as a reduction in cash or equivalents relative to current liabilities.
The most pronounced decrease appears between November 2022 and February 2023, when the quick ratio sharply fell from approximately 2.75 to just over 3.08, and subsequently remained low through 2023 and into early 2024. During this period, the ratio fluctuated narrowly around 2 to 3, signaling a much tighter liquidity position. The ratios throughout 2023 and early 2024 suggest that the company's quick assets are only a small multiple of current liabilities, which may reflect either a strategic shift towards less liquid current assets or an increase in short-term obligations.
From late 2024 onwards, the quick ratio stabilized somewhat but continued at modest levels, averaging around 2.0 to 2.4, with a slight decline towards the end of the period. Specifically, the ratio decreased from approximately 2.35 in August 2024 to 2.01 in November 2024, before marginally increasing again to around 2.04 in February 2025, and then declining to approximately 1.62 in May 2025.
Overall, the trend suggests that Neogen Corporation experienced a marked reduction in liquidity from its high levels in 2020 and early 2021 to more conservative, but relatively stable, levels in subsequent years. The initial exceptionally high ratios may have been indicative of conservative cash management or an excess of liquid assets during the early period, which subsequently adjusted as the company’s operational and financial strategies evolved. The lower but stable ratios in recent periods reflect a more balanced liquidity position, though they warrant monitoring for potential liquidity risks if current conditions persist or deteriorate further.
Peer comparison
May 31, 2025