Worthington Industries Inc (WOR)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 3.47 | 3.42 | 1.88 | 1.95 | 2.60 | 2.57 | 2.43 | 2.17 | 1.92 | 1.85 | 2.33 | 2.28 | 2.50 | 2.65 | 3.03 | 3.26 | 2.53 | 2.15 | 2.13 | 2.13 |
| Quick ratio | 2.12 | 2.22 | 1.14 | 1.04 | 1.61 | 1.50 | 1.28 | 1.09 | 0.98 | 0.88 | 1.17 | 1.59 | 1.61 | 2.20 | 2.34 | 2.51 | 1.28 | 1.20 | 1.19 | 1.09 |
| Cash ratio | 1.07 | 1.12 | 0.46 | 0.23 | 0.63 | 0.40 | 0.20 | 0.05 | 0.04 | 0.04 | 0.27 | 0.76 | 0.79 | 1.37 | 1.54 | 1.73 | 0.38 | 0.21 | 0.15 | 0.09 |
Worthington Industries Inc has demonstrated strong liquidity positions over the period, as indicated by its current ratio consistently above 1.5. The current ratio has shown a general increasing trend, reaching 3.47 as of August 31, 2024, reflecting the company's ability to meet its short-term obligations with its current assets.
Furthermore, the quick ratio, which excludes inventory from current assets, also portrays a healthy liquidity position for the company. While the quick ratio has been slightly lower than the current ratio, it has remained above 1.0, indicating that Worthington Industries can cover its short-term liabilities even without relying on selling inventory.
The cash ratio, which is the most conservative liquidity ratio, has also exhibited a positive trend, with the company maintaining ample cash to cover its current liabilities. The cash ratio has improved significantly over time, reaching 1.07 as of August 31, 2024, suggesting that Worthington Industries possesses a solid cash position to meet its immediate financial obligations without relying on liquidating other current assets.
In conclusion, Worthington Industries Inc's liquidity ratios present a picture of strong liquidity management and financial health, with an increasing trend in the ratios over the observed period. This indicates the company's ability to efficiently manage its short-term liabilities and underscores its capacity to withstand potential financial challenges.
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
The cash conversion cycle of Worthington Industries Inc has shown variability over the past few periods.
The cash conversion cycle represents the time it takes for a company to convert its resources into cash flow. A lower cash conversion cycle indicates efficiency in managing working capital and turning inventory into sales, accounts receivable into cash, and cash into accounts payable.
Looking at the historical data provided, the cash conversion cycle has ranged from a low of 39.95 days to a high of 104.26 days over the periods mentioned. The company's cash conversion cycle was considerably high in some periods, indicating potential inefficiencies in managing working capital and cash flow.
The trend in the cash conversion cycle shows fluctuations, with some periods experiencing shorter cycles and others longer. A longer cash conversion cycle could suggest that the company is taking longer to collect payments from customers or convert inventory into sales, which may tie up cash and impact liquidity.
Analyzing the trend over time can help identify improvements or worsening in the company's operational efficiency and effectiveness in managing working capital. It would be beneficial for Worthington Industries Inc to closely monitor its cash conversion cycle and implement strategies to optimize working capital management for improved cash flow and liquidity.