STERIS plc (STE)

Current ratio

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Total current assets	US$ in thousands	2,869,120	2,011,440	1,879,000	1,211,750	1,224,040
Total current liabilities	US$ in thousands	931,127	861,844	922,222	577,920	503,607
Current ratio		3.08	2.33	2.04	2.10	2.43

March 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $2,869,120K ÷ $931,127K
= 3.08

The current ratio of STERIS plc has displayed a generally positive trend over the past five years, indicating healthy liquidity levels and the company's ability to meet its short-term obligations. The ratio has increased from 2.43 in 2020 to 3.08 in 2024, suggesting an improvement in the company's short-term solvency and ability to cover its current liabilities with current assets.

This upward trajectory in the current ratio may be attributed to effective management of working capital, efficient cash flow management, and prudent financial decision-making. It signifies that STERIS plc is in a strong position to handle its day-to-day financial commitments and unexpected expenses in the short term.

However, it is essential to note that while a high current ratio is generally favorable, an excessively high ratio may indicate an inefficient utilization of assets or an increase in idle resources. Therefore, continual monitoring and analysis of the current ratio, alongside other financial metrics, are crucial for gaining a comprehensive understanding of STERIS plc's liquidity position and financial health.