WD-40 Company (WDFC)
Liquidity ratios
| 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 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.47 | 2.36 | 2.27 | 2.40 | 2.80 | 2.62 | 2.26 | 2.25 | 2.25 | 2.51 | 2.81 | 2.88 | 2.81 | 3.05 | 3.09 | 3.09 | 3.08 | 1.81 | 1.66 | 1.84 |
| Quick ratio | 1.59 | 1.54 | 1.45 | 1.47 | 1.65 | 1.46 | 1.19 | 1.09 | 1.15 | 1.39 | 1.76 | 1.91 | 2.04 | 2.34 | 2.31 | 2.35 | 2.28 | 1.40 | 1.11 | 1.22 |
| Cash ratio | 0.45 | 0.43 | 0.50 | 0.51 | 0.54 | 0.40 | 0.33 | 0.32 | 0.34 | 0.42 | 0.52 | 0.73 | 1.00 | 1.02 | 1.01 | 0.98 | 0.94 | 0.75 | 0.32 | 0.35 |
WD-40 Company's liquidity ratios show a generally healthy trend over the periods analyzed. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, has been consistently above 2, indicating that WD-40 has a comfortable cushion to meet its current liabilities. The current ratio peaked at 3.09 in February 2021 before gradually declining but has remained above 2 in recent periods.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also demonstrates a stable liquidity position for WD-40. Although lower than the current ratio, the quick ratio has consistently been above 1, signaling the company's ability to cover immediate liabilities without relying heavily on inventory.
Furthermore, the cash ratio, which focuses solely on cash and cash equivalents to cover short-term obligations, shows WD-40's ability to meet its most immediate liabilities. The company's cash ratio has shown a positive trend, peaking at 1.02 in February 2021 and remaining above 0.30 in most periods.
Overall, the liquidity ratios of WD-40 Company suggest that the company is well-positioned to meet its short-term financial obligations and has a solid liquidity position to support its ongoing operations.
Additional liquidity measure
| 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 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 107.27 | 110.69 | 107.07 | 109.06 | 115.84 | 130.62 | 144.78 | 142.26 | 127.83 | 123.60 | 113.79 | 113.36 | 103.17 | 106.72 | 107.47 | 108.39 | 110.63 | 119.53 | 100.85 | 109.15 |
The cash conversion cycle for WD-40 Company fluctuated over the period indicated. It measures the time it takes for the company to convert its investments in inventory and other resources into cash from sales, and then re-invest that cash back into inventory.
The trend observed from the data is that the cash conversion cycle generally ranged between 100 to 145 days. The cycle peaked at 144.78 days on Feb 28, 2023, and reached its lowest point at 100.85 days on Feb 29, 2020.
Overall, a lower cash conversion cycle indicates a more efficient use of resources, as it reflects that the company is able to generate cash quickly from its operations. In contrast, a higher cash conversion cycle suggests that the company may be facing challenges in efficiently converting its investments into cash.
It would be important for WD-40 Company to closely monitor its cash conversion cycle to ensure it remains at optimal levels, allowing the company to effectively manage its working capital and operations more efficiently.