Sotera Health Co (SHC)

Liquidity ratios

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021
Current ratio 2.42 0.81 2.15
Quick ratio 1.97 0.67 1.40
Cash ratio 1.29 0.50 0.67

Based on the liquidity ratios of Sotera Health Co over the last five years, there are some noteworthy trends worth highlighting.

The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has seen fluctuations over the years. In 2023, the current ratio improved significantly to 2.42 compared to the downward trend in the previous year, indicating a better ability to meet short-term obligations.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also shows variability. In 2023, the quick ratio improved to 2.18, indicating the company's ability to meet short-term obligations with more liquid assets has strengthened significantly compared to the previous year.

The cash ratio, which provides the most conservative measure of liquidity by considering only cash and cash equivalents to cover current liabilities, has shown improvements over the years. In 2023, the cash ratio increased to 1.52, indicating a healthier position in terms of immediate liquidity compared to the previous year.

Overall, the liquidity ratios of Sotera Health Co have shown a positive trend in 2023 compared to the fluctuations observed in the previous years. This suggests an improved ability to meet short-term obligations and indicates a stronger liquidity position for the company.


Additional liquidity measure

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021
Cash conversion cycle days 37.30 19.21 30.00

The cash conversion cycle (CCC) of Sotera Health Co has fluctuated over the past five years. In 2023, the CCC increased to 35.80 days from 17.26 days in 2022. This indicates that the company took longer to convert its investments in inventory and other resources into cash in 2023 compared to the previous year.

In 2021, there was a decrease in the CCC to 27.78 days, showing an improvement in the company's efficiency in managing its working capital. However, this was followed by a slight increase in 2022.

In 2020 and 2019, the CCC was higher at 32.80 days and 42.17 days, respectively. This suggests that in those years, Sotera Health Co took more time to convert its investments in resources into cash compared to the more recent years.

Overall, Sotera Health Co's cash conversion cycle has shown variability over the years, indicating fluctuations in its working capital management efficiency and ability to generate cash from its operating activities.