Sotera Health Co (SHC)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Revenue | US$ in thousands | 1,049,290 | 1,003,690 | 931,478 |
| Total current assets | US$ in thousands | 557,244 | 645,010 | 345,961 |
| Total current liabilities | US$ in thousands | 230,654 | 791,567 | 161,161 |
| Working capital turnover | 3.21 | — | 5.04 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,049,290K ÷ ($557,244K – $230,654K)
= 3.21
The working capital turnover ratio for Sotera Health Co has experienced fluctuations over the past five years. In 2019, the ratio stood at 6.06, indicating that the company generated $6.06 in revenue for every dollar of working capital invested. This was followed by a decrease to 4.69 in 2020 and a further decline to 5.04 in 2021. This suggests a decrease in efficiency in utilizing working capital to generate revenue during these years.
However, there was a notable improvement in 2023, with the working capital turnover ratio increasing to 3.21. This indicates that the company generated $3.21 in revenue for each dollar of working capital invested. Although the ratio has not yet reached the levels seen in 2019, the uptrend signifies a potential enhancement in the company's efficiency in utilizing its working capital to generate revenue.
Overall, the fluctuation in Sotera Health Co's working capital turnover ratio suggests varying levels of effectiveness in managing its working capital to generate revenue over the analyzed period. Further analysis and context would be necessary to understand the reasons behind these fluctuations and the company's overall financial performance.
Peer comparison
Dec 31, 2023