Worthington Steel Inc (WS)

Based on the provided data, Worthington Steel Inc's liquidity ratios show slight fluctuations over the past four quarters.

1. Current Ratio:
The current ratio measures the company's ability to cover its short-term liabilities with its short-term assets. Worthington Steel Inc's current ratio has ranged from 1.58 to 1.83 over the past four quarters. A current ratio above 1 indicates that the company has more current assets than current liabilities, with the May 31, 2024 ratio of 1.62 falling within a stable range.

2. Quick Ratio:
The quick ratio (or acid-test ratio) provides a more stringent measure of liquidity, excluding inventory from current assets. Worthington Steel Inc's quick ratio has ranged from 0.83 to 1.08 over the past four quarters, with the February 29, 2024 ratio of 0.83 being the lowest. A quick ratio below 1 may suggest that the company may have difficulty meeting its short-term obligations without relying on inventory liquidation.

3. Cash Ratio:
The cash ratio measures the company's ability to cover its short-term liabilities with cash and cash equivalents alone. Worthington Steel Inc's cash ratio has varied from 0.04 to 0.36 over the past four quarters, with the November 30, 2023 ratio of 0.36 being the highest. A cash ratio below 1 indicates that the company may need to rely on other liquid assets or financing to meet its short-term obligations.

Overall, while the current ratio indicates a generally stable short-term liquidity position for Worthington Steel Inc, the quick and cash ratios suggest fluctuations in the more stringent measures of liquidity. It is important for the company to monitor and manage these ratios to ensure it can meet its short-term financial obligations effectively.

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Additional liquidity measure

The cash conversion cycle for Worthington Steel Inc has shown some fluctuation over the past four reporting periods. In May 31, 2024, the cash conversion cycle was 53.75 days, showing a slight increase compared to the previous period in February 29, 2024, where it was 52.63 days. This indicates that the company took slightly longer to convert its investments in raw materials into cash during this period.

However, when comparing the most recent data to November 30, 2023, where the cycle was 49.51 days, Worthington Steel Inc experienced an increase in the cash conversion cycle. This suggests a longer period required to sell inventory, collect receivables, and pay suppliers in the more recent period, impacting cash flow efficiency negatively.

August 31, 2023, displayed a cash conversion cycle of 50.57 days, indicating a slight improvement compared to the cycle in May 31, 2024. Overall, it is important for Worthington Steel Inc to closely monitor and manage its working capital components to optimize its cash conversion cycle and enhance liquidity and operational efficiency.