Worthington Steel Inc (WS)
Cash conversion cycle
| May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | ||
|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 49.46 | 50.88 | 44.47 | 50.57 |
| Days of sales outstanding (DSO) | days | 50.72 | 52.52 | 46.67 | — |
| Number of days of payables | days | 46.42 | 50.77 | 41.63 | — |
| Cash conversion cycle | days | 53.75 | 52.63 | 49.51 | 50.57 |
May 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 49.46 + 50.72 – 46.42
= 53.75
The cash conversion cycle of Worthington Steel Inc has shown some variability over the past few quarters. On May 31, 2024, the company's cash conversion cycle was 53.75 days, slightly higher compared to the previous quarter's 52.63 days. This suggests that it took Worthington Steel slightly longer to convert its investments in raw materials and production into cash during this period.
Looking back further, the trend indicates an increasing cash conversion cycle from the Nov 30, 2023, quarter's 49.51 days. Notably, the cycle was higher on Aug 31, 2023, at 50.57 days compared to the previous quarter. This indicates potential challenges in efficiently managing working capital and operating cash flows in the business during that period.
Comparing the most recent data with the historical performance, it is evident that the company has experienced fluctuations in its cash conversion cycle over the past few quarters. This may indicate changes in the company's operational efficiency, inventory management, or accounts receivable and payable processes.
Overall, monitoring and managing the cash conversion cycle effectively is crucial for Worthington Steel Inc to optimize its working capital management, enhance liquidity, and ensure a healthy cash flow position in the long run. Further analysis and evaluation of the factors influencing these fluctuations can provide insights for potential improvements in the company's financial performance.
Peer comparison
May 31, 2024