MSA Safety (MSA)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	935,509	854,122	784,834	752,731	763,352
Payables	US$ in thousands	111,872	112,532	106,780	86,854	89,120
Payables turnover		8.36	7.59	7.35	8.67	8.57

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $935,509K ÷ $111,872K
= 8.36

The payables turnover ratio for MSA Safety Inc has shown fluctuations over the past five years, ranging from 7.35 to 8.72. This ratio indicates how efficiently the company is managing its accounts payable by measuring the number of times a company pays off its average accounts payable balance during a period.

In general, a higher payables turnover ratio implies that the company is paying its suppliers more frequently, which can indicate good liquidity and strong supplier relationships. However, it can also suggest that the company is not taking full advantage of trade credit terms.

In the case of MSA Safety Inc, the payables turnover ratio has been fluctuating within a relatively narrow range, indicating consistency in managing its accounts payable over the years. The decrease in the ratio from 8.72 in 2020 to 7.35 in 2021 may suggest a longer payment cycle during that period, potentially impacting cash flow and relationships with suppliers. However, the subsequent increase in the ratio in the following years indicates improvement in managing payables.

Overall, a detailed analysis of MSA Safety Inc's payables turnover ratio suggests that the company has been effectively managing its accounts payable, with a notable improvement in the efficiency of payables turnover in recent years.