Worthington Steel Inc (WS)
Solvency ratios
| May 31, 2025 | May 31, 2024 | Aug 31, 2023 | May 31, 2023 | Aug 31, 2022 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.83 | 1.89 | 1.71 | 1.71 | 1.84 |
The analysis of Worthington Steel Inc.'s solvency ratios reveals a consistent pattern indicating a conservative leverage profile with no recorded debt obligations as a percentage of assets, capital, or equity across multiple fiscal periods. Specifically, the debt-to-assets, debt-to-capital, and debt-to-equity ratios are uniformly zero from August 31, 2022, through May 31, 2025, suggesting the company has maintained an entirely debt-free capital structure during this timeframe.
In contrast, the financial leverage ratio, which measures the proportion of total assets financed by shareholders' equity relative to total assets, fluctuates within a narrow range. It decreases from 1.84 in August 2022 to 1.71 by May 2023 and August 2023, then rises slightly to 1.89 in May 2024 before settling at 1.83 in May 2025. These ratios reflect that the company employs minimal or no debt, implying a reliance predominantly on equity financing and indicating a strong solvency position with low financial risk.
Overall, the data suggests that Worthington Steel Inc. upholds a highly conservative financial strategy characterized by an absence of leverage, which enhances its solvency capacity but may also imply limited use of debt financing for growth or operational leverage purposes.
Coverage ratios
| May 31, 2025 | May 31, 2024 | Aug 31, 2023 | May 31, 2023 | Aug 31, 2022 | |
|---|---|---|---|---|---|
| Interest coverage | 0.00 | 37.03 | — | 45.23 | — |
The interest coverage ratio for Worthington Steel Inc. demonstrates notable variability across the periods analyzed. As of August 31, 2022, the data indicates that the ratio is not available or not reported ("—"). This absence suggests that either the necessary financial data was insufficient or the company had negative earnings before interest and taxes (EBIT), rendering the ratio undefined.
By May 31, 2023, the interest coverage ratio is reported at 45.23, indicating a highly comfortable buffer for meeting interest obligations. This exceptionally high ratio reflects strong earnings relative to interest expenses, positioning the company favorably in terms of debt service capacity during this period.
Moving forward to August 31, 2023, the interest coverage ratio again becomes unavailable ("—"), which could be attributed to similar reporting issues, negative or negligible EBIT, or other financial complexities affecting the ratio's calculation.
As of May 31, 2024, the ratio declines to 37.03, still representing a solid safety margin for interest payments, albeit significantly lower than the previous high. This decrease may reflect either a reduction in earnings, increased interest expenses, or a combination of both. Nevertheless, the ratio remains comfortably above critical thresholds indicating manageable debt servicing.
Finally, the forecasted or reported figure for May 31, 2025, shows a ratio of 0.00. This suggests either a complete absence of earnings before interest and taxes, or possibly negative EBIT, implying that the company may face significant challenges in meeting interest obligations through operational earnings alone at that point in time. Such a ratio underscores potential financial distress or restructuring needs.
In summary, while Worthington Steel Inc. exhibited a very strong interest coverage ratio in May 2023 and May 2024, the absence of data in some periods and the drop to zero in 2025 highlight increasing financial pressure and potential concern regarding the company's ability to comfortably service its interest expenses in the future.