Worthington Steel Inc (WS)
Quick ratio
| May 31, 2025 | May 31, 2024 | Aug 31, 2023 | May 31, 2023 | Aug 31, 2022 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 92,900 | 40,200 | 32,678 | 32,678 | 20,052 |
| Short-term investments | US$ in thousands | — | — | — | — | — |
| Receivables | US$ in thousands | 438,800 | 476,800 | — | 465,800 | — |
| Total current liabilities | US$ in thousands | 631,500 | 618,400 | 478,390 | 478,390 | 657,949 |
| Quick ratio | 0.84 | 0.84 | 0.07 | 1.04 | 0.03 |
May 31, 2025 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($92,900K
+ $—K
+ $438,800K)
÷ $631,500K
= 0.84
The analysis of Worthington Steel Inc.'s quick ratio over the specified periods reveals significant fluctuations, indicative of changing liquidity positions. As of August 31, 2022, the quick ratio stood at a notably low 0.03, suggesting that the company's most liquid assets were barely sufficient to cover immediate liabilities, reflecting a potentially precarious liquidity stance at that time.
By May 31, 2023, the quick ratio experienced a substantial improvement, rising to 1.04. This indicates that the company had achieved a more robust liquidity position, with liquid assets exceeding current liabilities, thereby providing a greater buffer against short-term financial obligations.
However, the subsequent period ending August 31, 2023, shows a sharp decline to 0.07, reverting near the initial levels observed in 2022. Such a drastic reduction implies a significant deterioration in liquidity, with liquid assets once again insufficient to cover immediate liabilities, which may signal cash flow challenges or asset liquidity issues.
The trend reverses markedly in the following periods, with the quick ratio climbing to 0.84 as of May 31, 2024, and maintaining that level through May 31, 2025. These readings suggest a substantial improvement in liquidity from the previous low points, implying that the company has increased its liquid assets relative to current liabilities, thereby restoring a more comfortable liquidity cushion, although it still remains slightly below the ideal ratio of 1.0.
Overall, the observed pattern demonstrates periods of liquidity stress interceded by phases of improved liquidity position. The initial low ratios highlight potential vulnerabilities in cash or liquid asset management, while the subsequent recovery phases suggest strategic or operational changes yielding better short-term asset management. The persistent increase in the latter periods points toward an ongoing improvement in liquidity management, although the ratios remain below or close to the critical threshold, highlighting the need for continued scrutiny to ensure sustained financial stability.
Peer comparison
May 31, 2025