John Wiley & Sons (WLY)

The liquidity position of John Wiley & Sons over the period from April 2021 to April 2024 reflects a relatively conservative stance with regard to its short-term financial health. The current ratio, which measures the company's ability to cover its current liabilities with current assets, demonstrated a slight upward trend from 0.53 in April 2021 to 0.60 in April 2023, indicating an incremental improvement in liquidity. However, the ratio remained below 1.0 throughout this period, suggesting that current assets were insufficient to cover current liabilities without relying on other sources of funding, which may point to potential liquidity constraints.

The quick ratio, a more stringent measure excluding inventories from current assets, showed a modest increase from 0.41 in April 2021 to 0.47 in April 2023. This indicates a gradual enhancement in the company's ability to meet short-term obligations using its most liquid assets, although it persisted below the generally acceptable benchmark of 1.0 in most years, further highlighting a conservative liquidity profile.

The cash ratio, which considers only cash and cash equivalents in relation to current liabilities, maintained a relatively stable and low level throughout the observed period. It increased slightly from 0.09 in April 2021 to 0.13 in April 2023. The low cash ratio points to a minimal portion of current liabilities being covered by readily available cash, which could imply reliance on other sources such as receivables or short-term financing to meet short-term obligations.

Overall, the company's liquidity ratios suggest a cautious approach with limited liquidity buffers. The ratios' incremental improvements indicate some strengthening in liquidity positions, yet they remain relatively conservative compared to industry norms. The consistently low levels across all three ratios imply that while John Wiley & Sons manages its short-term obligations within its current assets, it operates with a liquidity profile that warrants attention, especially in periods of financial stress or rapid operational changes.

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Additional liquidity measure

The cash conversion cycle (CCC) of John Wiley & Sons has exhibited notable fluctuations over the specified period, reflecting changes in operational efficiency related to inventory management, receivables collection, and payables management.

As of April 30, 2021, the CCC stood at approximately 27.49 days, indicating the duration it takes for the company to convert its investments in inventory and receivables into cash, net of the period it benefits from extending its payables. This relatively moderate cycle suggests a balanced approach to receivables collection and inventory turnover at that time.

By April 30, 2022, the CCC increased to approximately 36.89 days, indicating a lengthening of the cycle. This change may imply slower receivables collection, longer inventory turnover periods, or shorter payables periods, which could reflect operational or market condition shifts impacting cash flow timing.

Subsequently, by April 30, 2023, the cycle decreased again to approximately 27.79 days, close to the level observed in 2021. The reduction signifies an improvement in operating efficiency, possibly due to more effective receivables management, improved inventory turnover, or extended payables periods.

The further decline to around 25.15 days as of April 30, 2024, suggests continued efficiency gains, reducing the time between outlay for inventory and collection of receivables. This indicates more streamlined working capital management, leading to quicker cash conversion.

Finally, by April 30, 2025, the CCC is reported as 0.00 days. This outcome could imply an anomalous or exceptional situation—such as a change in reporting methodology, an accounting treatment adjustment, or a unique operational circumstance—that effectively eliminates the cash conversion cycle. Such a result indicates that the company's operational cycle aligns perfectly with its payable and receivable periods, or that cash flows are being managed in a manner that negates the traditional cycle altogether.

Overall, the trend demonstrates a return to a more efficient cash conversion cycle after a period of elongation. The fluctuations highlight the dynamic nature of John Wiley & Sons' working capital strategies and operational efficiencies across the analyzed period.