Sotera Health Co (SHC)
Working capital turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 1,049,288 | 990,639 | 976,166 | 987,523 | 1,003,687 | 993,346 | 970,806 | 956,084 | 931,478 | |||
| Total current assets | US$ in thousands | 557,244 | 519,646 | 546,692 | 923,799 | 645,010 | 420,734 | 398,681 | 371,560 | 345,961 | 337,305 | 401,105 | 328,367 |
| Total current liabilities | US$ in thousands | 230,654 | 200,594 | 200,330 | 600,149 | 791,567 | 140,031 | 142,021 | 143,851 | 161,161 | 133,606 | 148,792 | 138,019 |
| Working capital turnover | 3.21 | 3.10 | 2.82 | 3.05 | — | 3.54 | 3.78 | 4.20 | 5.04 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $1,049,288K ÷ ($557,244K – $230,654K)
= 3.21
The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales. A higher ratio indicates better efficiency in managing working capital.
Looking at the trend of Sotera Health Co's working capital turnover ratio over the past eight quarters, we observe fluctuations in the ratio. In Q4 2023, the working capital turnover ratio was 3.21, slightly higher than the previous quarter at 3.10. This suggests that the company improved its efficiency in utilizing working capital to generate sales during this period.
Comparing the Q4 ratios for 2023 with the same period in the previous year, we can see a slight decrease in efficiency as the ratio was higher in Q4 2022 at 3.54. However, it is important to note that a working capital turnover ratio above 3 is generally considered healthy as it indicates that the company is efficiently using its working capital to support its operations.
Further analysis of the components of working capital and sales figures would provide additional insights into the factors driving these fluctuations in the working capital turnover ratio. Monitoring this ratio over time can help assess Sotera Health Co's ability to effectively manage its working capital in relation to its sales activities.
Peer comparison
Dec 31, 2023