MSC Industrial Direct Company Inc (MSM)
Current ratio
| Sep 2, 2023 | Sep 3, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 1,317,510 | 1,543,620 | 1,314,240 | 1,237,770 | 1,199,610 |
| Total current liabilities | US$ in thousands | 649,436 | 725,944 | 561,928 | 408,733 | 446,916 |
| Current ratio | 2.03 | 2.13 | 2.34 | 3.03 | 2.68 |
September 2, 2023 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $1,317,510K ÷ $649,436K
= 2.03
The current ratio of MSC Industrial Direct Co., Inc. has exhibited a fluctuating trend over the past five years. The current ratio, which measures the company's ability to meet its short-term obligations with its current assets, has decreased from 3.03 in 2020 to 2.03 in 2023.
A current ratio of 2.03 indicates that the company possesses $2.03 in current assets for every $1 of current liabilities. Although a ratio above 1.0 generally suggests that the company can cover its short-term liabilities, a declining trend might warrant further investigation.
The decrease in the current ratio from 2020 to 2023 may indicate a relative decrease in the company's liquidity. This could be a concern for investors and creditors since it implies a decreased ability to pay short-term debts with its current assets. The decrease could be attributed to a rise in short-term liabilities, a decrease in current assets, or both.
It is essential to monitor the trend closely to ascertain the underlying reasons for the decline and assess whether it poses a significant risk to the company's financial health. Additionally, comparing the company's current ratio with that of its industry peers or benchmark companies can provide further insights into its financial position and liquidity management.
Peer comparison
Sep 2, 2023