Worthington Steel Inc (WS)
Cash conversion cycle
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 44.93 | 43.80 | 48.56 | 49.47 | 50.63 | 46.10 | 55.05 | 46.64 | 43.28 |
| Days of sales outstanding (DSO) | days | — | 48.42 | 42.39 | 49.01 | 50.72 | 50.87 | 46.40 | 53.19 | 47.07 | 45.39 |
| Number of days of payables | days | 54.32 | 42.91 | 36.46 | 44.50 | 46.43 | 50.52 | 43.15 | 48.69 | 44.14 | 41.96 |
| Cash conversion cycle | days | -54.32 | 50.44 | 49.74 | 53.07 | 53.75 | 50.98 | 49.35 | 59.55 | 49.58 | 46.70 |
May 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + — – 54.32
= -54.32
The analysis of Worthington Steel Inc.'s cash conversion cycle (CCC) over the observed period reveals fluctuations that reflect the company's operational efficiency and liquidity management strategies. The CCC values from February 28, 2023, through November 30, 2024, generally hover around the mid-40s to high 50s in days, indicating a moderate cycle duration. Specifically, the CCC increased from 46.70 days in February 2023 to a peak of 59.55 days in August 2023, suggesting that the company's inventory and receivables were tied up longer before cash inflows occurred during this interval.
Following this peak, the CCC declined to approximately 49.35 days by November 2023, signaling potential improvements in inventory turnover or receivables collection. The values remained relatively stable through February 2024 (50.98 days) and May 2024 (53.75 days), with slight variations indicating ongoing operational stabilization.
By August 31, 2024, the CCC slightly decreased to 53.07 days, maintaining a level comparable to previous months, and further decreased to 49.74 days by November 30, 2024. This reduction suggests a potential shortening of the cash cycle, possibly due to increased efficiency in managing receivables or inventories.
However, a significant anomaly is observed in the forecasted data for May 31, 2025, where the CCC is recorded as -54.32 days. This negative value indicates a reversal where cash inflows from sales are received significantly earlier than the payments for inventory and operational expenses, implying a substantial improvement in cash flow timing or changes in working capital management strategies. It could also reflect a temporary accounting anomaly or a strategic shift toward faster receivables collection.
Overall, the data indicates a trend of initial cycle elongation followed by stabilization and a subsequent notable improvement in cash conversion efficiency towards the later periods, culminating in an anticipated negative cycle. This progression suggests an enhanced ability to generate cash from operations more swiftly, possibly improving liquidity position and reducing reliance on external financing.
Peer comparison
May 31, 2025