Scholastic Corporation (SCHL)

Short-term

Turnover ratios

Scholastic Corporation's activity ratios provide insights into how efficiently the company is managing its inventory, receivables, payables, and working capital.

1. Inventory Turnover: The inventory turnover ratio has been fluctuating over the past few periods but generally remains above 4, indicating that Scholastic Corporation is effectively managing its inventory levels. The current ratio of 6.04 suggests that the company is able to sell and replace its inventory approximately 6 times a year.

2. Receivables Turnover: The receivables turnover ratio has shown variability, with a peak of 7.38 in the past and a low of 3.22. This indicates that the company is collecting its receivables efficiently, although there were fluctuations in the collection period during the observed periods.

3. Payables Turnover: The payables turnover ratio has also fluctuated but generally stayed above 7, suggesting that Scholastic Corporation is taking longer to pay its suppliers. The current ratio of 11.52 indicates that the company is paying its payables approximately 12 times a year.

4. Working Capital Turnover: The working capital turnover ratio reflects how effectively the company is utilizing its working capital to generate sales. There is some variability in this ratio, with the company generating sales equivalent to its working capital between 2.53 and 13.66 times a year.

Overall, Scholastic Corporation has demonstrated efficiency in managing its inventory, receivables, payables, and working capital, although some fluctuations in the ratios indicate the need for ongoing monitoring and strategic management of these key aspects of the business.

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Average number of days

Scholastic Corporation's activity ratios, namely Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables, provide insights into the efficiency of the company's operations and management of its working capital.

1. Days of Inventory on Hand (DOH): The trend in DOH shows the number of days it takes for Scholastic Corporation to sell its inventory. A decreasing trend in DOH over time is generally favorable, as it indicates that the company is managing its inventory more efficiently. However, an increasing trend in DOH may suggest overstocking or slowing sales.

2. Days of Sales Outstanding (DSO): DSO measures the average number of days it takes for the company to collect payment from its customers. A decreasing trend in DSO is preferable as it signifies faster collection of receivables and better cash flow management. Conversely, an increasing trend in DSO could indicate issues with credit policies or an increase in overdue accounts.

3. Number of Days of Payables: This ratio indicates the average number of days Scholastic Corporation takes to pay its suppliers. A longer payable period might suggest that the company is effectively using trade credit to manage its cash flow. However, an excessively long payable period could strain relationships with suppliers or signal liquidity problems.

By analyzing these activity ratios over time, investors and stakeholders can assess Scholastic Corporation's operational efficiency, working capital management, and potential areas for improvement in its supply chain and customer credit policies.

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Long-term

The fixed asset turnover ratio for Scholastic Corporation has shown a relatively stable trend over the past few years, ranging between 2.11 and 3.34. This ratio indicates that the company generates between 2.11 to 3.34 dollars in sales revenue for every dollar invested in fixed assets. The higher the fixed asset turnover ratio, the more effectively the company is utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover ratio has also exhibited a stable trend but at a lower level compared to the fixed asset turnover. The total asset turnover ratio for Scholastic Corporation has fluctuated between 0.58 and 0.96 over the same period. This ratio shows that the company generates between 0.58 to 0.96 dollars in sales revenue for every dollar invested in total assets. A higher total asset turnover ratio indicates better efficiency in generating sales relative to the total assets employed in the business.

Overall, the fixed asset turnover ratio shows that Scholastic Corporation has been relatively effective in utilizing its fixed assets to generate sales revenue, while the total asset turnover ratio indicates the company's efficiency in utilizing all of its assets (both fixed and current) to generate sales. The fluctuations in these ratios over time can provide insights into the company's operational efficiency and asset utilization strategies.