Worthington Steel Inc (WS)

Short-term

Turnover ratios

The inventory turnover for Worthington Steel Inc has shown a consistent range between 7.17 to 8.21 over the past four quarters, indicating that the company efficiently manages its inventory by converting it into sales multiple times throughout the year.

Similarly, the receivables turnover ratio has been stable, ranging from 6.95 to 7.82, implying that Worthington Steel collects its accounts receivable effectively, converting credit sales into cash efficiently.

The payables turnover ratio also reflects a consistently efficient payment cycle, with values ranging between 7.19 to 8.77. This suggests that the company is able to pay its suppliers promptly, benefiting from favorable credit terms while preserving liquidity.

The working capital turnover ratio has shown fluctuations between 6.85 to 8.95 over the past four quarters, indicating the company's ability to efficiently utilize its working capital to generate sales revenue. A higher turnover ratio signifies that Worthington Steel is generating more revenue per dollar of working capital employed.

Overall, the activity ratios of Worthington Steel Inc demonstrate sound management of inventory, receivables, payables, and working capital, contributing to the company's operational efficiency and financial performance.

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Average number of days

Days of Inventory on Hand (DOH) for Worthington Steel Inc has shown some fluctuation over the four periods analyzed, ranging from a low of 44.47 days in November 2023 to a high of 50.88 days in February 2024. This ratio measures how many days it takes for the company to sell its average inventory on hand, indicating the efficiency of inventory management.

Days of Sales Outstanding (DSO) measures how long it takes for the company to collect its accounts receivable. Worthington Steel Inc's DSO has ranged from 46.67 days in November 2023 to 52.52 days in February 2024. A lower DSO is generally preferred as it signifies faster collection of receivables.

The Number of Days of Payables measures how long it takes for the company to pay its suppliers. Worthington Steel Inc's payables days ranged from a low of 41.63 days in November 2023 to a high of 50.77 days in February 2024. A higher number of days indicates that the company is taking longer to pay its suppliers, which may impact supplier relationships.

Overall, the company's activity ratios suggest that there have been fluctuations in inventory management efficiency, accounts receivable collection, and accounts payable payment patterns over the periods analyzed. Worthington Steel Inc should continue to monitor and adjust these ratios to ensure optimal working capital management and efficiency in its operations.

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Long-term

Worthington Steel Inc's long-term activity ratios indicate the efficiency with which the company is utilizing its fixed assets and total assets to generate sales revenue. The fixed asset turnover ratio has been relatively stable over the past four quarters, ranging from 7.23 to 7.76. This suggests that Worthington Steel is effectively generating sales from its fixed assets, with each dollar of fixed assets generating approximately $7.23 to $7.76 in sales revenue.

On the other hand, the total asset turnover ratio has shown some fluctuations, ranging from 1.77 to 1.95. This ratio measures the company's ability to generate sales from all assets, including both fixed and current assets. A total asset turnover ratio of 1.84 as of May 31, 2024, indicates that Worthington Steel is generating $1.84 in sales for every dollar of total assets.

Overall, the fixed asset turnover ratios suggest that Worthington Steel is efficiently utilizing its fixed assets to generate sales, while the total asset turnover ratios indicate the company's ability to generate sales from its total asset base. Further analysis and comparison with industry benchmarks would provide more insight into Worthington Steel's efficiency in asset utilization.