Scholastic Corporation (SCHL)
Liquidity ratios
| 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 | Aug 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.27 | 1.20 | 1.32 | 1.31 | 1.48 | 1.46 | 1.49 | 1.48 | 1.61 | 1.50 | 1.53 | 1.45 | 1.48 | 1.45 | 1.83 | 1.87 | 2.06 | 1.49 | 1.57 | 1.50 |
| Quick ratio | 0.68 | 0.65 | 0.74 | 0.60 | 0.85 | 0.77 | 0.86 | 0.78 | 1.04 | 0.94 | 1.02 | 0.89 | 1.02 | 0.95 | 1.24 | 1.20 | 1.44 | 0.86 | 0.93 | 0.68 |
| Cash ratio | 0.21 | 0.18 | 0.23 | 0.21 | 0.37 | 0.31 | 0.36 | 0.36 | 0.51 | 0.47 | 0.45 | 0.47 | 0.53 | 0.48 | 0.59 | 0.63 | 0.79 | 0.42 | 0.43 | 0.32 |
The liquidity ratios of Scholastic Corporation show the company's ability to meet short-term obligations and operational needs.
- Current ratio has fluctuated over the periods, ranging from 1.20 to 2.06. The ratio indicates that the company has generally been able to cover its current liabilities with its current assets, although there was a significant increase in the past year, possibly indicating improved liquidity position.
- Quick ratio, which excludes inventory from current assets, has varied between 0.60 and 1.44. This ratio reflects the company's ability to meet short-term obligations without relying on the sale of inventory. The ratio has shown fluctuations, but generally, it suggests a moderate ability to meet immediate liquidity needs.
- Cash ratio, which is the most stringent liquidity measure, has ranged from 0.18 to 0.79. This ratio indicates the company's ability to cover its current liabilities with its cash and cash equivalents only. The ratio has shown variability, with periods of improvement and decline, suggesting fluctuations in the company's cash position over time.
Overall, while the current ratio indicates a healthy liquidity position overall, the downward trend in the quick ratio and inconsistency in the cash ratio suggest that Scholastic Corporation may need to closely monitor its liquidity management to ensure it can continue to meet its short-term obligations effectively.
Additional liquidity measure
| 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 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 86.28 | 98.94 | 104.84 | 93.65 | 98.88 | 109.68 | 115.12 | 102.05 | 100.52 | 105.72 | 121.66 | 107.26 | 134.02 | 154.03 | 150.15 | 117.17 | 108.05 | 87.28 | 109.22 | 88.75 |
The cash conversion cycle of Scholastic Corporation, which represents the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales, has shown fluctuating trends over the past years.
On average, the company's cash conversion cycle has been around 100 days, ranging from around 87 days to over 150 days. This indicates that Scholastic Corporation takes approximately 3 to 5 months to complete a full cycle of purchasing inventory, converting it to sales, and collecting cash from customers.
Analyzing the data, there seems to be some seasonal variation in the cash conversion cycle, with periods like May and November generally showing longer cycles compared to other months. It is important for the company to closely monitor and manage its working capital during these peak periods to optimize cash flow efficiency.
Overall, a lower cash conversion cycle is desirable as it indicates that the company can quickly turn its investments into revenue. Scholastic Corporation should focus on improving operational efficiencies, streamlining inventory management, and accelerating the collection of receivables to potentially reduce the length of its cash conversion cycle and enhance its financial performance.