Sotera Health Co (SHC)

As of December 31, 2020, Sotera Health Co had a current ratio of 2.24, indicating that the company had $2.24 in current assets for every $1 in current liabilities. The current ratio decreased slightly to 2.15 by December 31, 2021. However, by December 31, 2022, the current ratio dropped significantly to 0.81, raising concerns about the company's ability to meet its short-term obligations.

In terms of quick ratio, Sotera Health Co had a ratio of 0.73 on December 31, 2020, and 0.67 on December 31, 2021, implying a decline in its ability to cover immediate liabilities with its most liquid assets. The quick ratio further decreased to 0.50 by the end of 2022, signaling potential liquidity challenges.

The cash ratio, which measures a company's ability to cover its current liabilities using only its cash and cash equivalents, mirrored the trends seen in the quick ratio. Sotera Health Co had a cash ratio of 0.73 on December 31, 2020, and 0.67 on December 31, 2021, before dropping to 0.50 on December 31, 2022.

Overall, the liquidity ratios of Sotera Health Co show fluctuations over the years, with a notable decline in 2022. The company should closely monitor its liquidity position to ensure it can meet its short-term financial obligations effectively.

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Additional liquidity measure

The cash conversion cycle of Sotera Health Co has shown some fluctuations over the years. It was 33.22 days as of December 31, 2020, which increased to 48.00 days by December 31, 2021, indicating a longer period for the company to convert its investments in inventory and other resources back into cash. The cycle decreased significantly to 30.35 days by December 31, 2022, which suggests an improvement in the company's ability to manage its working capital efficiently.

However, by December 31, 2023, the cash conversion cycle slightly increased to 40.19 days, indicating that the company may be taking longer to realize cash from its operations. By December 31, 2024, the cycle improved to 36.02 days, although not at the same level as in 2022.

Overall, the trend in the cash conversion cycle of Sotera Health Co shows fluctuations in the efficiency of its working capital management over the years, with some years performing better than others. The company should continue monitoring and optimizing its cash conversion cycle to ensure smooth operations and healthy cash flows.