Sotera Health Co (SHC)

Short-term

Turnover ratios

Based on the activity ratios of Sotera Health Co provided in the data, the analysis is as follows:

1. Inventory Turnover:
- The inventory turnover ratio for Sotera Health Co has shown some fluctuations over the years. It decreased from 10.99 in 2020 to 7.60 in 2021, then increased to 12.03 in 2022, followed by a decrease to 9.08 in 2023, and finally rose to 10.13 in 2024. Generally, a higher inventory turnover indicates efficient management of inventory, but a very high ratio could also mean stockouts or lost sales. Sotera Health Co's inventory turnover has varied, and further analysis would be needed to determine the optimal inventory level for the company.

2. Receivables Turnover:
- The data provided does not include information on Receivables Turnover for Sotera Health Co. This ratio measures how effectively a company is collecting its accounts receivable. Without this information, it is challenging to assess the efficiency of the company in collecting payments from its customers.

3. Payables Turnover:
- Similar to receivables turnover, the data does not provide information on Payables Turnover for Sotera Health Co. The payables turnover ratio helps in understanding how efficiently a company is managing its payments to suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio reflects how effectively a company is utilizing its working capital to generate sales. Sotera Health Co's working capital turnover has ranged from 3.21 in 2023 to 5.04 in 2021. A higher ratio indicates a more efficient use of working capital in generating sales, while a lower ratio may suggest inefficiencies in utilizing the company's current assets to support its operations and growth.

In conclusion, while the inventory turnover and working capital turnover ratios provide insights into the efficiency of Sotera Health Co in managing its inventory and working capital, the absence of data on receivables turnover and payables turnover limits a comprehensive analysis of the company's overall activity and liquidity management. Additional information would be necessary to evaluate the company's performance in these areas effectively.

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Average number of days

Based on the provided data for Sotera Health Co, let's analyze the activity ratios:

1. Days of Inventory on Hand (DOH):
- The company's DOH has fluctuated over the years:
- In 2020, it was at 33.22 days.
- It increased to 48.00 days by the end of 2021.
- Improved significantly to 30.35 days by the end of 2022.
- However, it increased again to 40.19 days by the end of 2023.
- Slightly decreased to 36.02 days by the end of 2024.
- The trend in the DOH ratio indicates that the company's efficiency in managing its inventory has varied, with improvements and setbacks observed over the years.

2. Days of Sales Outstanding (DSO):
- The data provided shows that information on DSO is not available ("— days") for all the years from 2020 to 2024. This lack of data makes it difficult to assess the efficiency of the company in collecting its accounts receivable in a timely manner.

3. Number of Days of Payables:
- Similar to DSO, no information on the Number of Days of Payables is provided for the years 2020 to 2024. This absence of data makes it challenging to analyze the company's payment practices and relationships with its suppliers.

In conclusion, while there are clear insights into the company's inventory management efficiency through the DOH ratio, the lack of data for DSO and Number of Days of Payables restricts a comprehensive analysis of Sotera Health Co's overall activity ratios and working capital management.

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Long-term

The fixed asset turnover ratio for Sotera Health Co has improved from 1.26 in 2020 to 1.35 in 2021. This indicates that the company generated $1.35 in revenue for every $1 worth of fixed assets in 2021, showing a more efficient utilization of fixed assets to generate sales.

However, the fixed asset turnover ratio decreased to 1.26 in 2022. This could suggest a potential decline in the company's ability to efficiently generate revenue from its fixed assets.

Regarding the total asset turnover ratio, there has been a consistent increase from 0.30 in 2020 to 0.36 in 2024. This implies that Sotera Health Co is generating more revenue for every dollar of total assets over the years, indicating an improvement in overall asset efficiency and the company's ability to generate sales in relation to its total asset base.

Overall, it is important for Sotera Health Co to closely monitor its fixed asset turnover ratio to ensure the efficient utilization of fixed assets in generating revenue, while also maintaining the positive trend seen in the total asset turnover ratio.