MSA Safety (MSA)

Liquidity ratios

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Current ratio 2.79 2.36 2.54 2.40 2.44
Quick ratio 0.57 0.44 0.50 0.57 0.76
Cash ratio 0.57 0.44 0.50 0.57 0.76

MSA Safety's liquidity ratios indicate the company's ability to meet its short-term obligations.

1. Current Ratio: The current ratio measures MSA Safety's ability to cover its short-term liabilities with its current assets. The trend shows a slight fluctuation over the years, with the ratio decreasing from 2.44 in 2020 to 2.36 in 2023 before increasing to 2.79 in 2024. A current ratio above 1 indicates that MSA Safety has more than enough current assets to cover its current liabilities.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets. MSA Safety's quick ratio has shown a declining trend over the years, falling from 0.76 in 2020 to 0.44 in 2023 before slightly increasing to 0.57 in 2024. A quick ratio above 1 is generally preferred, indicating that MSA Safety can meet its short-term obligations without relying on inventory.

3. Cash Ratio: The cash ratio is the most conservative liquidity ratio, focusing solely on the company's ability to cover its current liabilities with its cash and cash equivalents. MSA Safety's cash ratio has followed a similar trend to the quick ratio, decreasing from 0.76 in 2020 to 0.44 in 2023 before increasing to 0.57 in 2024. A cash ratio above 1 implies that MSA Safety holds enough cash to pay off its current liabilities immediately.

In summary, while MSA Safety's liquidity ratios have demonstrated some fluctuations over the years, the company generally maintains a strong liquidity position with current and quick ratios well above 1, indicating a healthy ability to meet short-term obligations.


Additional liquidity measure

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash conversion cycle days 114.31 114.16 144.58 130.51 95.28

The cash conversion cycle of MSA Safety has shown fluctuations over the years. In December 2020, the company's cash conversion cycle was 95.28 days, indicating that it took approximately 95 days for MSA Safety to convert its investments in inventory and accounts receivable into cash.

However, by December 2021, the cash conversion cycle extended to 130.51 days, suggesting a delay in converting investments into cash compared to the previous year. This increase could indicate issues with managing inventory levels or collecting accounts receivable efficiently.

In December 2022, the cash conversion cycle further increased to 144.58 days, indicating a continued challenge in converting assets into cash quickly. This prolonged cycle may strain the company's liquidity and working capital management.

By December 2023, there was a slight improvement in the cash conversion cycle, decreasing to 114.16 days. This reduction could signify efforts to streamline operational processes and enhance cash flow efficiency.

As of December 2024, the cash conversion cycle remained relatively stable at 114.31 days. While the cycle did not worsen significantly, it still reflects the need for MSA Safety to focus on optimizing inventory turnover and receivables collection to shorten the cash conversion cycle and improve overall liquidity management.