Worthington Steel Inc (WS)
Quick ratio
| May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | ||
|---|---|---|---|---|---|
| Cash | US$ in thousands | 40,200 | 60,800 | 214,400 | 27,401 |
| Short-term investments | US$ in thousands | — | — | — | — |
| 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