MSA Safety (MSA)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	947,695	935,509	854,122	784,834	757,775
Inventory	US$ in thousands	296,796	292,604	338,316	280,617	197,819
Inventory turnover		3.19	3.20	2.52	2.80	3.83

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $947,695K ÷ $296,796K
= 3.19

Inventory turnover is an essential financial ratio that indicates how effectively a company is managing its inventory levels. Analyzing the data provided for MSA Safety over the past five years, we observe a trend in inventory turnover ratios. In December 2020, the inventory turnover ratio was 3.83 times, indicating that MSA Safety inventory was turning over approximately 3.83 times during that year.

However, in the subsequent years, we notice a decrease in the inventory turnover ratio. By December 2021, the inventory turnover ratio declined to 2.80 times, suggesting a decrease in the efficiency of inventory management. This trend continued into December 2022, with the inventory turnover ratio falling further to 2.52 times.

A positive development occurred in December 2023 when the inventory turnover ratio improved to 3.20 times, indicating a more efficient management of inventory compared to the previous year. Finally, in December 2024, the inventory turnover ratio remained relatively stable at 3.19 times.

Overall, the fluctuation in MSA Safety's inventory turnover ratios over the years highlights the importance of closely monitoring inventory levels and sales to ensure optimal inventory management practices. It is essential for the company to strike a balance between having enough inventory to meet demand and avoiding excess stock that could tie up financial resources. Management may need to review and adjust inventory control processes to maintain efficiency and profitability.