MSA Safety (MSA)

Short-term

Turnover ratios

MSA Safety Inc's activity ratios provide insights into how efficiently the company manages its inventory, receivables, payables, and working capital.

1. Inventory turnover:
- MSA Safety Inc's inventory turnover has fluctuated over the past five years, ranging from 2.52 to 4.14.
- The increasing trend from 2021 to 2023 indicates that the company is managing its inventory more efficiently.
- A higher inventory turnover ratio suggests that MSA is selling its products at a faster rate, which can help in preventing inventory obsolescence and reducing carrying costs.

2. Receivables turnover:
- MSA Safety Inc's receivables turnover has also varied, ranging from 4.79 to 5.81 over the period.
- The increasing trend in receivables turnover indicates that the company is collecting its outstanding receivables more quickly.
- A higher receivables turnover ratio implies that MSA is effectively managing its credit policies and minimizing the risk of bad debts.

3. Payables turnover:
- MSA Safety Inc's payables turnover has ranged from 7.35 to 8.72 over the past five years.
- The higher payables turnover ratio suggests that the company is paying its suppliers more frequently, which may help maintain good relationships with vendors.
- A high payables turnover ratio can also indicate efficient cash management practices.

4. Working capital turnover:
- MSA Safety Inc's working capital turnover has fluctuated but generally remained within a fairly stable range over the period.
- A higher working capital turnover ratio indicates that MSA is generating revenue efficiently relative to its working capital.
- This ratio reflects how effectively the company utilizes its current assets to generate sales.

Overall, MSA Safety Inc's activity ratios collectively indicate that the company is efficiently managing its inventory, receivables, payables, and working capital to drive operational performance and maximize profitability.

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Average number of days

To analyze the activity ratios of MSA Safety Inc based on the data provided:

1. Days of Inventory on Hand (DOH):
- MSA Safety Inc had a decreasing trend in the Days of Inventory on Hand from 2019 to 2020, significantly reducing it from 88.24 days to 95.28 days.
- However, the trend reversed in the following years, with an increase to 130.51 days in 2021 and then to 144.58 days in 2022. This indicates that the company may be holding onto inventory for a longer period, potentially tying up funds and facing the risk of obsolescence.
- In 2023, the DOH improved slightly to 114.16 days, but it still remains higher compared to previous years.

2. Days of Sales Outstanding (DSO):
- The Days of Sales Outstanding for MSA Safety Inc show some fluctuations over the years. In 2020, DSO was at its lowest at 69.81 days, but it increased to 75.39 days in 2021 before decreasing again to 71.80 days in 2022 and further to 62.80 days in 2023.
- A lower DSO suggests that the company is able to collect its accounts receivable more quickly, which is positive for cash flow management.

3. Number of Days of Payables:
- MSA Safety Inc has been managing its payables effectively over the years. The number of Days of Payables remained relatively stable, ranging between 41.84 days to 49.66 days.
- The consistent management of payables indicates that the company has been able to maintain good relationships with its suppliers while optimizing its working capital.

Overall, MSA Safety Inc should continue to focus on managing its inventory levels efficiently to avoid excessive holding costs and potential obsolescence. Improving collection of accounts receivable is also crucial for maintaining healthy cash flows. The stability in the number of Days of Payables reflects effective management practices in dealing with suppliers.

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Long-term

MSA Safety Inc's fixed asset turnover has shown a generally increasing trend over the past five years, reaching 8.44 in 2023 from 8.39 in 2019. This indicates that the company generated $8.44 in sales for every dollar invested in fixed assets in 2023. The increasing fixed asset turnover suggests improved efficiency in utilizing fixed assets to generate sales.

In contrast, the total asset turnover has been fluctuating, with a decrease from 0.81 in 2019 to 0.58 in 2021, followed by a slight increase to 0.64 in 2022 and further to 0.82 in 2023. The total asset turnover represents the company's ability to generate sales from all its assets. The recent increase in total asset turnover suggests that MSA Safety Inc is becoming more efficient in utilizing all its assets to generate sales.

Overall, the increasing trends in both fixed asset turnover and total asset turnover indicate improved efficiency in asset utilization and sales generation for MSA Safety Inc over the analyzed period.