Scholastic Corporation (SCHL)
Quick ratio
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 124,000 | 113,700 | 224,500 | 316,600 | 366,500 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 273,400 | 250,200 | 286,900 | 326,200 | 344,900 |
| Total current liabilities | US$ in thousands | 626,400 | 534,700 | 340,000 | 619,700 | 695,500 |
| Quick ratio | 0.63 | 0.68 | 1.50 | 1.04 | 1.02 |
May 31, 2025 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($124,000K
+ $—K
+ $273,400K)
÷ $626,400K
= 0.63
The quick ratio of Scholastic Corporation has exhibited notable fluctuations over the observed period from May 31, 2021, to May 31, 2025. During the fiscal year ending May 31, 2021, the quick ratio stood at 1.02, indicating that the company's liquid assets slightly exceeded its current liabilities, suggesting a relatively strong liquidity position at that time. The ratio experienced a marginal increase the following year, reaching 1.04 by May 31, 2022, which continued to reflect the company's capability to meet its short-term obligations with readily available assets.
However, by the fiscal year ending May 31, 2023, the quick ratio experienced a significant increase to 1.50. This improvement suggests that Scholastic Corporation enhanced its liquidity position, possibly through increased liquid assets or reduced current liabilities, thereby providing a more comfortable cushion to cover immediate liabilities. Such a ratio typically indicates sound short-term financial health and efficient liquidity management.
Contrasting sharply with this trend, the quick ratio declined substantially in the subsequent years, falling to 0.68 by May 31, 2024, and further to 0.63 by May 31, 2025. These figures suggest a deterioration in liquidity, with the company's liquid assets no longer sufficient to fully cover its current liabilities, which could be indicative of increased short-term obligations, reduced liquid holdings, or both. The ratios below 1.00 in these years reflect a potential liquidity concern, highlighting the company's decreasing capacity to meet its immediate liabilities without resorting to additional financing or asset liquidation.
In summary, the rapid increase in the quick ratio until 2023 indicates an improving short-term liquidity position during that period, while the subsequent decline reveals a deterioration in liquidity health, warranting further analysis into the company's asset management and liability structure to understand the underlying causes of these changes.
Peer comparison
May 31, 2025