Worthington Industries Inc (WOR)
Cash conversion cycle
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 74.07 | 70.93 | 74.37 | 41.58 | 24.57 | 21.94 | 65.53 | 73.97 | 62.32 | 55.84 | 48.80 | 54.44 | 61.20 | 80.79 | 93.23 | 95.61 | 81.40 | 65.52 | 47.18 | 47.27 |
| Days of sales outstanding (DSO) | days | — | 65.24 | 60.79 | 31.93 | 27.18 | 21.16 | 61.19 | 64.86 | 19.70 | 59.99 | 47.57 | 54.07 | 61.14 | 66.74 | 66.03 | 73.25 | 73.88 | 68.86 | 57.83 | 53.43 |
| Number of days of payables | days | 45.13 | 36.00 | 34.50 | 18.38 | 12.12 | 11.35 | 50.83 | 57.95 | 12.99 | 45.46 | 34.45 | 42.15 | 53.89 | 67.13 | 67.77 | 84.14 | 77.22 | 65.45 | 52.37 | 43.53 |
| Cash conversion cycle | days | 28.94 | 100.18 | 100.65 | 55.14 | 39.64 | 31.75 | 75.89 | 80.88 | 69.03 | 70.37 | 61.91 | 66.36 | 68.45 | 80.39 | 91.50 | 84.72 | 78.06 | 68.92 | 52.64 | 57.18 |
May 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 74.07 + — – 45.13
= 28.94
The analysis of Worthington Industries Inc.'s cash conversion cycle (CCC) over the period provided reveals notable fluctuations, indicating variability in the company's management of working capital components—namely, days sales outstanding (DSO), days inventory outstanding (DIO), and days payable outstanding (DPO).
From August 31, 2020, to November 30, 2020, the CCC decreased from 57.18 days to 52.64 days, reflecting an improvement in providing liquidity or efficiency in managing receivables or payables. However, this trend reversed sharply by February 28, 2021, when the CCC increased to 68.92 days, suggesting a lengthening of the working capital cycle, potentially due to slower collections or increased inventory holding periods.
The upward trajectory continued through May 2021 and August 2021, reaching a peak of 84.72 days and 91.50 days, respectively, indicating a period of increased working capital requirements possibly driven by operational expansions or lower payables. Subsequently, the CCC decreased somewhat by November 2021 to 61.91 days, signaling an improvement, potentially through better receivables collection or more efficient inventory management.
In the subsequent period, the cycle fluctuated, with a notable decline to 66.36 days in August 2022 and further reduction to 68.45 days by May 2022, which may reflect enhanced working capital efficiency. However, there was an uptick again to 80.88 days by August 2023, and 75.89 days by November 2023, suggesting periods of extended working capital cycle possibly associated with supply chain or operational challenges.
The most drastic change is observed between November 2023 and February 2024, where the CCC sharply drops to 31.75 days, a significant improvement that indicates a much faster turnover of receivables, inventories, or payable deferment. This trend continues into May 2024 with a slight increase to 39.64 days, then rises again to 55.14 days by August 2024. A substantial increase occurs subsequently, with the CCC peaking at 100.65 days in November 2024, and remaining elevated at around 100.18 days in February 2025, representing a prolonged working capital cycle.
The rapid fluctuations highlight that Worthington Industries has experienced periods of both operational efficiency and operational challenges influencing its cash conversion cycle. Shorter cycles in early 2024 suggest periods of improved cash flow management, while the extended cycles in late 2024 and early 2025 could indicate increased inventory levels, slower receivables collection, or extended payables, potentially impacting liquidity and operational flexibility.
Overall, the company's CCC demonstrates a pattern of significant variability, reflecting dynamic operational conditions, strategic timing of receivables and payables, and possibly external influences such as supply chain disruptions or market demand shifts. Continuous monitoring of the components contributing to the CCC would be essential to understanding ongoing working capital management efficiencies or challenges.
Peer comparison
May 31, 2025