Scholastic Corporation (SCHL)

Short-term

Turnover ratios

The activity ratios of Scholastic Corporation over the analyzed periods demonstrate notable trends in inventory management, receivables collection, payables settlement, and working capital efficiency.

Inventory Turnover:
The inventory turnover ratio has fluctuated within the range of approximately 2.05 to 2.94 over the period. Historically, the ratio hovers around 2.2 to 2.6, indicating a relatively consistent rate of inventory utilization. Recent periods show a gradual upward trend, reaching approximately 2.65 by the end of May 2025, suggesting improved inventory management and potentially more efficient sales cycles.

Receivables Turnover:
This ratio exhibits considerable variation, with the lowest at 3.22 in November 2020 and peaking at 8.27 during August 2023. The substantial increase in the receivables turnover ratio in later periods indicates an improved ability to collect receivables more swiftly. The ratio advancing from below 4 in early periods to over 8 signifies a marked enhancement in receivables management and cash flow collection efficiency.

Payables Turnover:
The payables turnover ratio shows fluctuations, with values ranging approximately from 3.65 to 5.94. The spike to 5.94 in February 2024 suggests a period of rapidly settling supplier obligations, likely reflecting either a strategic delay in payments prior to that point or an acceleration in paying suppliers. Overall, the ratio remains within a moderate range, indicating a balanced approach to accounts payable management.

Working Capital Turnover:
The working capital turnover ratio demonstrates an increasing trend, moving from about 2.53 in late 2020 to as high as 18.44 in August 2024. This significant rise signals an increasing efficiency in generating sales from the working capital employed. The sharp escalations in later periods imply effective working capital utilization, possibly driven by improved operational efficiency or sales expansion relative to current assets and liabilities.

Overall Assessment:
Scholastic's activity ratios reflect a pattern of strengthening operational efficiency. While inventory turnover remains relatively stable, receivables collection capability has substantially improved, indicating better cash flow management. The fluctuations in payables suggest active management of supplier relationships, and the considerable rise in working capital turnover implies greater effectiveness in deploying current assets to generate revenue. These trends collectively suggest ongoing efficiency enhancements within the company's operational activities.

---

Average number of days

The activity ratios for Scholastic Corporation, specifically the days of inventory on hand (DOH), days of sales outstanding (DSO), and days of payables, reveal several trends over the specified period from August 2020 through May 2025.

Days of Inventory on Hand (DOH):
Throughout the period, DOH has exhibited fluctuations with a general upward trend, indicating a tendency for inventory to be held longer at times. Starting from 160.04 days in August 2020, the DOH increased to a peak of approximately 178.15 days in August 2022, suggesting slower inventory turnover or accumulation of unsold inventory during this period. In subsequent periods, the DOH declined somewhat, reaching a lower point of around 124.08 days in May 2025, implying advancements in inventory management or increased sales velocity. Overall, the trend indicates phases of inventory build-up followed by periods of improved inventory turnover.

Days of Sales Outstanding (DSO):
The DSO initially fluctuated but showed a generally decreasing trend from August 2020 (80.17 days) to a low of approximately 44.14 days in August 2023, suggesting an improvement in collection efficiency and shorter receivable cycles. After this low point, DSO increased slightly but remained within manageable levels, reaching about 68.08 days in May 2025. This indicates that the company has been able to shorten the time taken to collect receivables over the period, enhancing cash flow.

Number of Days of Payables:
The days of payables exhibited a variable pattern, with fluctuations across the periods. The payable days ranged from a low of 61.49 days in February 2024 to a high of 100.12 days in August 2021. Throughout the period, there were instances of longer payable periods, which could reflect strategic management of cash outflows or negotiating extended payment terms. Notably, the payable days decreased significantly to around 61.49 days in February 2024, indicating a possible change in payment practices. Subsequently, the payable days increased again, reaching approximately 78.01 days in May 2025.

Summary of Activity Ratios:
Overall, Scholastic Corporation's activity ratios suggest an improvement in operational efficiency over time, notably in receivables management with decreasing DSO, which benefits cash flow. Inventory management shows periods of build-up but overall a trend toward faster inventory turnover toward the end of the period. The variability in payables indicates active management of payment terms, with some periods characterized by extended payment durations and others by shorter periods, impacting working capital management.

These trends collectively point to strategic adjustments in operational practices, reflected through inventory, receivables, and payables management, aiming for better liquidity and efficiency.

---

Long-term

The analysis of Scholastic Corporation’s long-term activity ratios reveals notable trends over the period from August 2020 through August 2023, with data gaps thereafter. Both the Fixed Asset Turnover and Total Asset Turnover ratios exhibit variations that reflect shifts in the company's asset utilization efficiency.

The Fixed Asset Turnover ratio indicates how effectively the company utilizes its fixed assets to generate sales. Starting at 2.21 in August 2020, the ratio experienced incremental growth, reaching a peak of 3.34 in November 2022. This upward trajectory suggests an improvement in asset efficiency, with the company generating more sales per dollar of fixed assets over this period. Notably, after reaching this peak, a decline is observed with the ratio falling to 2.69 in August 2023, indicating a potential decrease in fixed assets' utilization efficiency or a strategic change such as asset expansion not immediately reflected in corresponding sales.

Similarly, the Total Asset Turnover ratio demonstrates a steady increase from 0.71 in August 2020 to a high of 0.94 in August 2023. The gradual rise indicates enhanced overall asset utilization, with the company generating higher sales per dollar of total assets over time. This improvement suggests operational efficiencies or effective asset management strategies.

Overall, the trends in these long-term activity ratios illustrate a period where Scholastic Corporation significantly enhanced its efficiency in utilizing both fixed and total assets, especially from 2020 through 2022. The peak ratios in late 2022 to mid-2023 reflect optimal asset deployment prior to the slight decline in fixed asset turnover in August 2023. The continued increase in total asset turnover during this period reinforces a positive trajectory in asset productivity, although the decline in fixed asset turnover could hint at increased capital investment or changes in asset base structure. These ratios collectively indicate a period of operational improvement followed by a potential rebalancing or asset base adjustment.