MSC Industrial Direct Company Inc (MSM)
Liquidity ratios
| Mar 2, 2024 | Dec 2, 2023 | Sep 2, 2023 | Jun 3, 2023 | Mar 4, 2023 | Dec 3, 2022 | Sep 3, 2022 | May 28, 2022 | Feb 26, 2022 | Nov 27, 2021 | Aug 28, 2021 | May 29, 2021 | Feb 27, 2021 | Nov 28, 2020 | Aug 29, 2020 | May 30, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | Jun 1, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.01 | 2.02 | 2.03 | 1.93 | 2.04 | 2.14 | 2.13 | 2.37 | 2.37 | 2.30 | 2.34 | 1.70 | 2.14 | 2.23 | 3.03 | 2.63 | 1.75 | 2.90 | 2.68 | 2.50 |
| Quick ratio | 0.72 | 0.70 | 0.75 | 0.09 | 0.08 | 0.04 | 1.01 | 1.12 | 1.11 | 1.09 | 1.07 | 0.77 | 0.99 | 1.06 | 1.51 | 1.52 | 0.84 | 1.40 | 1.28 | 0.08 |
| Cash ratio | 0.04 | 0.04 | 0.08 | 0.09 | 0.08 | 0.04 | 0.06 | 0.05 | 0.07 | 0.11 | 0.07 | 0.04 | 0.04 | 0.10 | 0.31 | 0.60 | 0.06 | 0.07 | 0.07 | 0.08 |
The current ratio of MSC Industrial Direct Company Inc has been relatively stable, ranging between 1.70 and 2.37 over the past few quarters, indicating a healthy ability to meet its short-term obligations with current assets.
However, the quick ratio has shown significant fluctuations, with a low of 0.04 in some quarters, suggesting a potential issue with the company's ability to meet its short-term liabilities using only its most liquid assets.
The cash ratio has also varied, with a low of 0.04 and a high of 0.60, reflecting the company's cash position relative to its current liabilities.
Overall, while the current ratio shows strength in liquidity, the quick and cash ratios indicate potential weaknesses that should be monitored closely to ensure the company's ability to meet its short-term obligations without relying on inventory or other less liquid assets.
Additional liquidity measure
| Mar 2, 2024 | Dec 2, 2023 | Sep 2, 2023 | Jun 3, 2023 | Mar 4, 2023 | Dec 3, 2022 | Sep 3, 2022 | May 28, 2022 | Feb 26, 2022 | Nov 27, 2021 | Aug 28, 2021 | May 29, 2021 | Feb 27, 2021 | Nov 28, 2020 | Aug 29, 2020 | May 30, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | Jun 1, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 112.77 | 117.34 | 116.20 | 73.75 | 79.34 | 77.58 | 145.36 | 148.63 | 144.92 | 137.91 | 137.87 | 163.40 | 150.96 | 154.64 | 161.69 | 145.64 | 134.61 | 132.55 | 134.11 | 78.66 |
The cash conversion cycle of MSC Industrial Direct Company Inc has shown fluctuations over the past several quarters. The cycle represents the time it takes for the company to convert its investments in inventory into cash received from sales.
The cash conversion cycle was relatively stable in the mid-70 to mid-80-day range from May 2020 to March 2023, indicating efficient management of inventory and collection of receivables. However, in the following quarters, there was an increase in the cycle, peaking at 163.40 days in August 2021 and then showing some variability but remaining above 130 days until March 2024.
The prolonged cash conversion cycle observed in recent quarters may signify challenges in managing inventory levels, delays in collecting receivables, or possibly a slowdown in sales conversion to cash. This could impact the company's liquidity and working capital management, highlighting areas that may require attention to optimize cash flow efficiency.
Further analysis of the underlying factors driving these changes in the cash conversion cycle, such as inventory turnover, accounts receivable collection period, and accounts payable payment period, would provide a more detailed understanding of the company's operational and financial performance.