Worthington Industries Inc (WOR)
Cash conversion cycle
| Aug 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 41.59 | 28.75 | 85.62 | 95.71 | 19.94 | 55.84 | 48.80 | 54.44 | 61.20 | 80.79 | 93.23 | 95.61 | 81.40 | 65.52 | 47.18 | 47.27 | 56.53 | 47.32 | 45.56 | 48.56 |
| Days of sales outstanding (DSO) | days | 32.04 | 27.49 | 79.32 | 83.53 | 61.17 | 59.99 | 47.57 | 54.07 | 61.14 | 66.74 | 66.03 | 73.25 | 73.88 | 68.86 | 57.83 | 53.43 | 41.69 | 52.16 | 51.13 | 48.36 |
| Number of days of payables | days | 18.38 | 16.30 | 66.41 | 74.98 | 12.99 | 45.46 | 35.87 | 43.46 | 53.89 | 67.13 | 67.77 | 84.14 | 81.78 | 65.45 | 52.37 | 43.53 | 34.47 | 45.37 | 39.70 | 40.42 |
| Cash conversion cycle | days | 55.25 | 39.95 | 98.53 | 104.26 | 68.12 | 70.37 | 60.49 | 65.05 | 68.45 | 80.39 | 91.50 | 84.72 | 73.50 | 68.92 | 52.64 | 57.18 | 63.75 | 54.11 | 56.98 | 56.51 |
August 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 41.59 + 32.04 – 18.38
= 55.25
The cash conversion cycle of Worthington Industries Inc has exhibited fluctuations over the past few quarters. The cash conversion cycle, which measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, has ranged from as low as 39.95 days to as high as 104.26 days.
The trend indicates some variability in the efficiency of the company's operations in managing its inventory, accounts receivable, and accounts payable. A lower cash conversion cycle indicates a faster turnaround of cash, suggesting better efficiency in managing working capital.
The company experienced a significant increase in its cash conversion cycle from November 2023 to February 2024, reaching a peak of 104.26 days. This could indicate potential challenges in managing inventory levels or collections on accounts receivable during that period.
It is important for Worthington Industries Inc to closely monitor and manage its cash conversion cycle to ensure optimal working capital management. By improving efficiency in converting investments into cash, the company can enhance its liquidity position and overall financial health.
Peer comparison
Aug 31, 2024