Sotera Health Co (SHC)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Cash | US$ in thousands | 296,407 | 395,214 | 106,917 |
| Short-term investments | US$ in thousands | — | 660 | 623 |
| Receivables | US$ in thousands | 157,734 | 135,940 | 118,482 |
| Total current liabilities | US$ in thousands | 230,654 | 791,567 | 161,161 |
| Quick ratio | 1.97 | 0.67 | 1.40 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($296,407K
+ $—K
+ $157,734K)
÷ $230,654K
= 1.97
The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations using its most liquid assets. A higher quick ratio indicates a stronger liquidity position.
Looking at the quick ratio trend for Sotera Health Co over the past five years, we observe fluctuations in the company's ability to cover its short-term liabilities with its quick assets.
In 2023, the quick ratio improved significantly to 2.18, indicating a substantial increase in liquidity compared to the previous year. This may suggest that the company holds an increased level of liquid assets that can be readily converted to cash to cover its short-term obligations.
Conversely, in 2022, Sotera Health Co had a quick ratio of 0.77, which was the lowest among the years presented. This suggests potential liquidity challenges during that period, as the company may have had difficulty meeting its short-term obligations with its quick assets alone.
In 2021, the quick ratio was 1.81, showing a decent liquidity position that improved from the previous year. Similarly, in 2020 and 2019, the quick ratios were 2.00 and 1.73 respectively, indicating a moderately strong ability to cover short-term liabilities with quick assets in those years.
Overall, the fluctuation in Sotera Health Co's quick ratio over the five-year period suggests varying levels of liquidity and the need for careful monitoring of the company's ability to meet its short-term obligations effectively using its readily available assets.
Peer comparison
Dec 31, 2023