Sotera Health Co (SHC)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Current ratio 2.75 2.88 2.93 3.20 2.42 2.59 2.73 1.54 0.81 3.00 2.81 2.58 2.15 2.52 2.70 2.38 2.24 2.13 2.09 0.52
Quick ratio 1.46 1.58 1.46 1.73 1.31 1.26 1.35 1.10 0.50 1.18 0.99 0.85 0.67 0.87 1.06 0.79 0.82 0.75 0.66 0.52
Cash ratio 1.46 1.58 1.46 1.73 1.31 1.26 1.35 1.10 0.50 1.18 0.99 0.85 0.67 0.87 1.06 0.79 0.82 0.75 0.66 0.52

The current ratio of Sotera Health Co has shown fluctuations over the periods analyzed, ranging from a low of 0.52 as of March 31, 2020, to a high of 3.20 as of March 31, 2024. This ratio indicates the company's ability to cover its short-term liabilities with its current assets. The general trend shows an improvement in liquidity over time, with the ratio consistently above 1, reaching a peak in the latest period analyzed.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets. Sotera Health's quick ratio also exhibits variability, with values ranging from 0.50 to 1.73 during the periods reported. A ratio above 1 suggests that the company can meet its short-term obligations without relying on the sale of inventory.

The cash ratio, which is the most conservative liquidity measure, considers only cash and cash equivalents in relation to current liabilities. Sotera Health Co's cash ratio shows a similar pattern of fluctuation over time, with values between 0.50 and 1.73 observed. A higher cash ratio indicates a stronger ability to meet short-term liabilities without relying on other current assets.

Overall, the liquidity ratios of Sotera Health Co have generally improved over the periods analyzed, with the current ratio consistently above 1, the quick ratio above 1 in most cases, and the cash ratio also demonstrating a healthy liquidity position. However, the significant fluctuations in certain periods, particularly the sharp decline in the current ratio as of December 31, 2022, warrant further investigation into the company's asset and liability management strategies.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Cash conversion cycle days 33.90 35.65 41.81 39.01 38.90 30.64 34.35 38.09 30.35 30.53 33.50 39.35 48.00 34.06 33.12 32.08 33.22 28.41 29.37 31.97

The cash conversion cycle of Sotera Health Co has shown fluctuations over the past years. It started at 31.97 days on March 31, 2020, decreased to 28.41 days by September 30, 2020, before experiencing a spike to 48.00 days on December 31, 2021. The company managed to reduce this cycle to 30.35 days by December 31, 2022, demonstrating an improvement in managing its cash flow. However, by June 30, 2024, the cycle increased to 41.81 days due to certain factors affecting the company's working capital efficiency.

Overall, the trend in the cash conversion cycle indicates that Sotera Health Co has experienced some fluctuations in its ability to efficiently convert its resources into cash over the years. The management should continue monitoring and analyzing its operational processes to maintain a healthy cash conversion cycle for sustainable financial performance.