STERIS plc (STE)

Cash conversion cycle

		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
Days of inventory on hand (DOH)	days	71.07	79.40	84.86	86.08	83.00	104.30	101.56	97.76	90.72	95.98	89.96	84.96	81.70	89.56	93.00	112.45	65.11	62.00	59.42	59.35
Days of sales outstanding (DSO)	days	69.79	61.88	62.14	59.92	67.63	65.07	65.65	63.71	68.34	62.78	59.61	58.41	63.61	64.63	72.28	79.64	71.58	66.40	60.83	61.16
Number of days of payables	days	34.33	29.13	28.95	28.55	30.97	33.73	36.32	33.15	36.47	33.52	32.54	31.36	32.08	31.20	36.12	44.02	32.43	28.35	26.65	28.61
Cash conversion cycle	days	106.54	112.15	118.04	117.45	119.66	135.64	130.89	128.32	122.59	125.24	117.03	112.01	113.24	122.98	129.16	148.07	104.25	100.06	93.61	91.89

March 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 71.07 + 69.79 – 34.33
= 106.54

The cash conversion cycle of STERIS plc has shown fluctuations over the past few years. The cycle represents the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales. A shorter cash conversion cycle is generally favorable as it indicates efficient management of working capital.

Looking at the data provided, we can see that the cash conversion cycle for STERIS plc varied between 91.89 days in June 2020 to 148.07 days in June 2021. The cycle then gradually decreased to 106.54 days by March 2025.

During the period analyzed, the company experienced some fluctuations in its cash conversion cycle, but overall there is a trend of improvement in managing its working capital efficiency. A decreasing trend in the cash conversion cycle suggests that the company has been able to optimize its inventory management, accounts receivable collection, and accounts payable payment processes.

It is important for STERIS plc to continue monitoring and managing its cash conversion cycle effectively to ensure that it maintains optimal levels of working capital and liquidity. By efficiently managing this cycle, the company can enhance its financial performance and strengthen its overall operational efficiency.