STERIS plc (STE)

Inventory turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019
Cost of revenue (ttm)	US$ in thousands	3,089,449	3,049,739	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	1,764,419	1,730,611	1,710,456	1,702,534	1,710,899	1,684,491
Inventory	US$ in thousands	674,535	855,617	821,129	768,835	604,410	694,357	644,936	620,404	574,999	594,599	564,532	593,067	315,067	294,132	278,593	276,970	263,544	252,046	236,837	233,587
Inventory turnover		4.58	3.56	3.59	3.73	4.63	3.80	4.06	4.30	4.47	4.08	3.92	3.25	5.60	5.88	6.14	6.15	6.49	6.68

March 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $3,089,449K ÷ $674,535K
= 4.58

The inventory turnover ratio of STERIS plc has exhibited some fluctuations over the past few quarters. The ratio has ranged from a low of 3.25 in the second quarter of 2021 to a high of 6.68 in the fourth quarter of 2019. Generally, a higher inventory turnover ratio indicates that the company is selling its inventory more frequently within a specific period.

In the latest quarter, ending March 31, 2024, the inventory turnover ratio stands at 4.58. This implies that STERIS plc converted its inventory into sales approximately 4.58 times during the quarter. Compared to the previous quarter, the ratio has increased, indicating an improvement in the efficiency of managing inventory levels.

It is also notable that the inventory turnover ratio has shown a pattern of seasonal variability, with generally higher ratios reported in the first and fourth quarters of each year. This could be due to factors such as increased sales volumes during certain periods or more effective inventory management practices.

Overall, a rising inventory turnover ratio suggests that STERIS plc is effectively managing its inventory levels and turning them into revenue, which is essential for maintaining profitability and liquidity in the business.