MSA Safety (MSA)

MSA Safety Inc's liquidity ratios provide insight into the company's ability to meet its short-term obligations.

The current ratio has been gradually declining over the past few years, from 2.50 in 2019 to 2.36 in 2023. While the current ratio of 2.36 as of December 31, 2023, indicates that the company has $2.36 in current assets for every $1 in current liabilities, the decreasing trend suggests a potential decrease in the company's ability to cover its short-term obligations.

The quick ratio, which excludes inventory from current assets, also reflects a decreasing trend, from 1.83 in 2019 to 1.48 in 2023. A quick ratio of 1.48 as of December 31, 2023, means that the company has $1.48 in liquid assets for every $1 in current liabilities. This decline may indicate potential issues with the company's short-term liquidity position.

The cash ratio, which is the most stringent measure of liquidity, has also been decreasing over the years, falling from 0.87 in 2019 to 0.56 in 2023. A cash ratio of 0.56 as of December 31, 2023, signifies that the company only has $0.56 in cash and cash equivalents to cover $1 in current liabilities. This decreasing trend suggests that MSA Safety Inc may be facing challenges in maintaining sufficient cash reserves to meet its short-term obligations.

Overall, the downward trends in the current ratio, quick ratio, and cash ratio indicate a potential deterioration in MSA Safety Inc's liquidity position. It is essential for the company to closely monitor its liquidity levels and take appropriate measures to strengthen its short-term financial health.

---

Additional liquidity measure

The cash conversion cycle of MSA Safety Inc has fluctuated over the past five years, showing a mix of improvement and deterioration. In 2023, the cash conversion cycle stands at 133.32 days, indicating that, on average, it takes the company around 133 days to convert its investments in inventory and other resources into cash from sales. This is a significant reduction from the previous year's cycle of 172.62 days, suggesting that the company has been more efficient in managing its working capital and turning it into cash.

However, when compared to the cycle in 2021 and 2020, which were 152.64 days and 128.84 days, respectively, the current cycle is closer to the 2021 figure, indicating a slight deterioration in efficiency from the best performance year in 2020.

Moreover, the cash conversion cycle has increased when compared to 2019, where it was 115.55 days. This suggests that the company may be facing challenges in managing its cash conversion cycle efficiently.

Overall, MSA Safety Inc's cash conversion cycle has shown variability over the past five years, with improvements in some years and setbacks in others. This metric provides insights into the company's efficiency in managing its working capital and converting it into cash, highlighting areas that may require further attention to enhance operational performance.