MSA Safety (MSA)

Short-term

Turnover ratios

The analysis of MSA Safety's activity ratios reveals the following trends:

1. Inventory Turnover:
- The inventory turnover ratio has fluctuated over the years, ranging from a low of 2.40 in September 30, 2022, to a high of 3.95 in March 31, 2020.
- Generally, the trend shows a gradual decline in inventory turnover, indicating that the company is holding onto its inventory for a slightly longer period.
- A lower inventory turnover ratio may suggest potential issues with inventory management efficiency and could lead to higher carrying costs or obsolescence risks.

2. Receivables Turnover:
- The data does not provide any information on the receivables turnover ratio, which makes it challenging to assess the efficiency of the company in collecting payments from its customers.
- This lack of information limits our ability to gauge how quickly MSA Safety is converting its accounts receivable into cash.

3. Payables Turnover:
- Similar to receivables turnover, there is no data available for payables turnover, making it difficult to evaluate how well the company manages its accounts payables.
- A high payables turnover ratio could indicate that the company is efficiently managing its trade credit terms with suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio has exhibited fluctuations over the years, with values ranging from 2.86 to 3.94.
- A higher working capital turnover ratio suggests that the company is generating more revenue per dollar of working capital employed.
- The increasing trend in the working capital turnover ratio indicates that MSA Safety has been able to improve its efficiency in utilizing its working capital to generate sales.

Overall, while some activity ratios provide insights into MSA Safety's operational efficiency, the lack of data for receivables and payables turnover limits the comprehensive assessment of the company's overall working capital management and cash conversion cycle. It would be beneficial to have more information on these ratios to better understand the company's financial performance.

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Average number of days

Based on the provided data for MSA Safety, let's analyze the activity ratios:

1. Days of Inventory on Hand (DOH):
- The trend in DOH for MSA Safety reveals fluctuations over the periods reviewed, varying between a low of 92.37 days on March 31, 2020, and a high of 151.89 days on September 30, 2022.
- Generally, the number of days MSA Safety holds inventory has been on an upward trajectory, which may indicate potential inefficiencies in managing inventory levels or slowing sales.
- A peak was observed on June 30, 2022, at 151.89 days, followed by a slight decrease to 144.31 days on December 31, 2024. This decrease could signify efforts to optimize inventory management.

2. Days of Sales Outstanding (DSO):
- Unfortunately, there is no data provided for Days of Sales Outstanding (DSO), making it impossible to evaluate MSA Safety's efficiency in collecting receivables.

3. Number of Days of Payables:
- Similar to DSO, there is no information available regarding the Number of Days of Payables, making it challenging to assess MSA Safety's payment practices to suppliers.

In conclusion, while the Days of Inventory on Hand demonstrate some fluctuations, the lack of data for Days of Sales Outstanding and Number of Days of Payables limits our comprehensive analysis of MSA Safety's overall activity performance.

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Long-term

The fixed asset turnover ratio measures how effectively a company utilizes its fixed assets to generate revenue. For MSA Safety, the trend in fixed asset turnover has shown a slight decline from 8.69 in March 2020 to 7.70 in March 2023, with some fluctuations in between. This indicates that the company may be becoming slightly less efficient in generating sales from its fixed assets over time.

On the other hand, the total asset turnover ratio evaluates the company's ability to generate sales from all its assets. MSA Safety's total asset turnover ratio has fluctuated between 0.58 and 0.83 from December 2020 to June 2024, showing some variability but generally maintaining a range around 0.70. This suggests that while the company has been able to generate revenue from its total assets, there have been some fluctuations in the efficiency of asset utilization.

Overall, the analysis of MSA Safety's long-term activity ratios indicates that there is room for improvement in optimizing the utilization of both fixed and total assets to enhance revenue generation and overall operational efficiency.