Worthington Steel Inc (WS)

Quick ratio

May 31, 2024 Feb 29, 2024 Nov 30, 2023 Aug 31, 2023 Feb 28, 2023 Nov 30, 2022 Aug 31, 2022
Cash US$ in thousands 40,200 60,800 214,400 27,401 -20,052
Short-term investments US$ in thousands 40,104
Receivables US$ in thousands 476,800 475,000 430,100
Total current liabilities US$ in thousands 618,400 645,400 595,300 612,492
Quick ratio 0.84 0.83 1.08 0.04

May 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($40,200K + $—K + $476,800K) ÷ $618,400K
= 0.84

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. A quick ratio below 1 indicates that a company may have difficulty covering its current liabilities with its liquid assets alone.

Based on the provided historical data for Worthington Steel Inc, the quick ratio fluctuated significantly over the past few quarters. In May 2024, the quick ratio stood at 0.84, which implies that the company had $0.84 in liquid assets available to cover each $1 of current liabilities. This suggests a potential liquidity challenge in meeting short-term obligations.

Comparing this to the quick ratio of 1.08 in November 2023, we see an improvement in the company's short-term liquidity position. However, the quick ratio dropped sharply to 0.04 in August 2023, indicating a significant liquidity strain during that period.

Unfortunately, there is missing data for February 2023, November 2022, and August 2022, which limits our ability to track the trend more comprehensively over time. In general, a quick ratio of less than 1 raises concerns about a company's liquidity risk and ability to meet its short-term obligations. Worthington Steel Inc should aim to improve its quick ratio to maintain a healthy liquidity position and ensure financial stability.


Peer comparison

May 31, 2024