Worthington Steel Inc (WS)

Short-term

Turnover ratios

Inventory turnover for Worthington Steel Inc has been consistently high over the past four years, indicating that the company is efficient in managing its inventory levels and quickly turning inventory into sales. The decreasing trend from 2021 to 2024 may suggest improved inventory management practices.

Receivables turnover data is only available for the most recent year, 2024, showing a healthy turnover ratio of 7.20. This implies that Worthington Steel is efficient in collecting payments from its customers.

Payables turnover information is not provided for the previous years, but for 2024, the company has a payables turnover ratio of 7.86. This indicates that Worthington Steel pays its suppliers in a timely manner, which is crucial for maintaining good relationships with vendors.

The working capital turnover ratio has been showing an upward trend from 2021 to 2024. This indicates that Worthington Steel is effectively utilizing its working capital to generate sales revenue. The company's ability to efficiently convert working capital into sales demonstrates strong operational efficiency.

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Average number of days

Days of Inventory on Hand (DOH) for Worthington Steel Inc has improved over the years, decreasing from 92.04 days in August 2021 to 49.46 days in May 2024. This indicates that the company has been managing its inventory more efficiently, reducing the time it takes to sell its products. A lower DOH is generally seen as positive as it implies faster inventory turnover.

Days of Sales Outstanding (DSO) and Number of Days of Payables are not available for 2023, 2022, and 2021, but in the latest period of May 2024, the company had a DSO of 50.73 days and a Number of Days of Payables of 46.42 days.

A DSO of 50.73 days suggests that Worthington Steel Inc takes around 51 days to collect its accounts receivable, which could indicate a relatively prompt collection process. On the other hand, a Number of Days of Payables of 46.42 days shows that the company takes approximately 46 days to pay its suppliers, which could signify a balanced approach to managing its payables.

Overall, based on the provided data, Worthington Steel Inc seems to be effectively managing its inventory turnover, accounts receivable collection, and accounts payable payment, which are crucial for optimizing its working capital management and operating efficiency.

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Long-term

Worthington Steel Inc's long-term activity ratios indicate how efficiently the company is utilizing its assets to generate sales over the period from August 31, 2021, to May 31, 2024.

The fixed asset turnover ratio has been relatively stable, ranging from 7.23 to 7.96 during the period. This indicates that Worthington Steel Inc is efficiently utilizing its fixed assets to generate sales revenue, with a higher ratio suggesting the company is effectively generating sales relative to its investment in fixed assets. The high fixed asset turnover ratios suggest that the company has been effectively maximizing the use of its fixed assets to generate sales.

In contrast, the total asset turnover ratio decreased from 1.56 in August 2021 to 1.84 in May 2024. This indicates that while the company is generating sales revenue, the efficiency at which it is utilizing all its assets has decreased over time. A lower total asset turnover ratio may indicate that the company has more assets in proportion to its sales, which could potentially lower overall profitability.

Overall, the trend in the long-term activity ratios for Worthington Steel Inc signals mixed performance in asset utilization efficiency over the specified period. It is crucial for the company to closely monitor and manage its asset turnover ratios to ensure optimal utilization of its assets and sustainable long-term growth.