Sotera Health Co (SHC)

Cash conversion cycle

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
Days of inventory on hand (DOH) days 37.35 30.64 34.35 38.09 30.35 30.53 33.50 39.35 48.00
Days of sales outstanding (DSO) days 54.87 55.51 58.47 52.37 49.44 52.20 53.62 48.01 46.43
Number of days of payables days 54.92 46.15 45.35 50.48 60.58 49.91 55.15 47.55 64.43
Cash conversion cycle days 37.30 40.00 47.48 39.98 19.21 32.82 31.97 39.81 30.00

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 37.35 + 54.87 – 54.92
= 37.30

The cash conversion cycle of Sotera Health Co has shown some fluctuations over the past eight quarters. In Q4 2023, the company's cash conversion cycle was 35.80 days, indicating the number of days it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.

Compared to the previous quarters, the Q4 2023 cash conversion cycle of 35.80 days was lower than Q3 2023 (37.91 days) but higher than Q2 2023 (45.88 days) and Q1 2023 (37.86 days). This suggests that the company improved its efficiency in converting inventory and other resources into cash in Q4 2023 compared to the prior quarter but was less efficient than in Q1 2023.

Furthermore, when looking at year-over-year comparisons, the Q4 2023 cash conversion cycle was higher than in Q4 2022 (17.26 days), indicating a longer cash conversion cycle in the current year-end quarter compared to the prior year-end period.

Overall, the company's cash conversion cycle has shown variability over the past two years, with fluctuations in efficiency in managing its working capital and converting it into cash inflows from sales. An increasing trend in the cash conversion cycle may indicate potential liquidity challenges, while a decreasing trend may signal improved operational efficiency.


Peer comparison

Dec 31, 2023

Company name
Symbol
Cash conversion cycle
Sotera Health Co
SHC
37.30
DaVita HealthCare Partners Inc
DVA
12.26
Progyny Inc
PGNY
51.33