Worthington Steel Inc (WS)
Cash conversion cycle
| May 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | ||
|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 49.46 | 46.28 | 56.59 | 92.04 |
| Days of sales outstanding (DSO) | days | 50.73 | — | — | — |
| Number of days of payables | days | 46.42 | — | — | — |
| Cash conversion cycle | days | 53.77 | 46.28 | 56.59 | 92.04 |
May 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 49.46 + 50.73 – 46.42
= 53.77
The cash conversion cycle of Worthington Steel Inc has shown fluctuations over the past four years. In the most recent period ending on May 31, 2024, the company's cash conversion cycle was 53.77 days, indicating the time it takes for the company to convert its investments in inventory and other resources into cash from sales and back into cash through the collection of accounts receivable.
Comparing this to the previous periods, there has been a general improvement in the cash conversion cycle. In August 2023, the cycle stood at 46.28 days, showing a faster conversion of cash compared to May 31, 2024. However, in August 2022 and August 2021, the cash conversion cycles were 56.59 days and 92.04 days, respectively, reflecting slower cash conversion processes in the past.
The trend of the cash conversion cycle highlights Worthington Steel Inc's ability to efficiently manage its working capital and cash flow. The recent improvement in the cash conversion cycle suggests that the company may have enhanced its inventory management, accounts receivable collection, and payment practices, resulting in a more streamlined cash conversion process. Analyzing the cash conversion cycle over time can provide valuable insights into the company's operational efficiency and liquidity management.
Peer comparison
May 31, 2024