STERIS plc (STE)

Inventory turnover

		Mar 31, 2025	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
Cost of revenue (ttm)	US$ in thousands	2,985,601	2,985,915	2,963,375	2,962,085	2,966,335	2,994,385	2,951,184	2,870,535	2,798,147	2,640,436	2,616,796	2,665,255	2,568,702	2,423,351	2,215,557	1,925,011	1,766,235	1,731,453	1,711,298	1,703,376
Inventory	US$ in thousands	581,329	649,558	688,933	698,587	674,535	855,617	821,129	768,835	695,493	694,357	644,936	620,404	574,999	594,599	564,532	593,067	315,067	294,132	278,593	276,970
Inventory turnover		5.14	4.60	4.30	4.24	4.40	3.50	3.59	3.73	4.02	3.80	4.06	4.30	4.47	4.08	3.92	3.25	5.61	5.89	6.14	6.15

March 31, 2025 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $2,985,601K ÷ $581,329K
= 5.14

Inventory turnover is a key financial ratio that indicates how efficiently a company is managing its inventory. It is calculated by dividing the cost of goods sold by the average inventory levels. A higher inventory turnover ratio signifies that the company is selling its inventory quickly, while a lower ratio may indicate overstocking or slow sales.

For STERIS plc, the inventory turnover has shown fluctuations over the periods under review. The ratio was relatively stable around 6.15 to 5.61 from June 2020 to March 2021, suggesting efficient management of inventory during that time. However, there was a notable decline in the ratio to 3.25 by June 2021, indicating potential challenges in inventory management efficiency.

Subsequently, there were improvements in the inventory turnover ratio, reaching 4.47 by March 2022. The ratio fluctuated around 4.00 to 4.60 from March 2022 to December 2024, showing some variability in inventory management efficiency.

Overall, while there were fluctuations in the inventory turnover ratio for STERIS plc, the company managed to maintain a reasonable level of efficiency in inventory turnover throughout the periods analyzed, with improvements seen towards the later quarters. Monitoring this ratio over time can provide insights into the company's inventory management practices and operational performance.