MSA Safety (MSA)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	114.16	144.58	130.51	118.78	88.47
Days of sales outstanding (DSO)	days	62.80	80.27	74.04	75.39	69.81
Number of days of payables	days	43.65	48.09	49.66	42.12	42.61
Cash conversion cycle	days	133.32	176.76	154.88	152.06	115.67

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 114.16 + 62.80 – 43.65
= 133.32

The cash conversion cycle of MSA Safety Inc has shown variability over the past five years. In 2023, the company's cash conversion cycle decreased to 133.32 days from 172.62 days in 2022, indicating an improvement in the efficiency of converting resources into cash. However, this cycle was higher compared to the levels seen in 2021 and 2020, where it stood at 152.64 days and 128.84 days, respectively. The lowest cash conversion cycle was observed in 2019 at 115.55 days.

This variability suggests that MSA Safety Inc may have experienced challenges in managing its working capital efficiently over the years. A lower cash conversion cycle indicates that the company is able to collect cash from its operating activities more quickly, which is generally a positive sign. On the other hand, a longer cash conversion cycle may imply that the company is taking longer to receive payments from customers or to convert inventory into sales.

Overall, MSA Safety Inc should continue to monitor and manage its cash conversion cycle effectively to ensure optimal working capital management and liquidity. This can help the company maintain financial stability and support its operations and growth objectives.