Analysis of Steris Annual Report: Capital Structure and Stock Performance

Running head: FINANCE
Finance
Name of the student
Name of the university
Student ID
Author note

1FINANCE
Table of Contents
Introduction................................................................................................................................2
Determination of major source of capital...................................................................................2
Computation of debt ratios.........................................................................................................3
Determination of return on stock...............................................................................................5
Conclusion..................................................................................................................................5
Reference....................................................................................................................................7

2FINANCE
Introduction
Steris offers services and products for infection prevention and other associated
products. It is focussed mainly on medical devices, pharmaceutical and medical products to
the customers. It further offers the customers unique mix of the innovative capital equipments
like washers, sterilizers, equipment system for management, surgical tables and connectivity
solution. Aim of the report is to analyse the annual report of Steris and comment upon its
capital structure. The report will further compute the debt ratios of the company and will
analyse the leverage position of the entity. The report will also determine return on stock over
the past 5 year period of time ("Financials - Annual Reports | STERIS Corporation", 2019).
Determination of major source of capital
From the above table it can be identified that for the year ended 31st March 2018,
major source of the capital was equity as the equity component of capital structure is 60.88%
whereas the debt component is only 39.12% ("Financials - Annual Reports | STERIS
Corporation", 2019). Higher equity component as against the debt component indicates that
the company is less dependent on outside borrowing and hence, is lower leveraged. On the
contrary, companies with higher debt financing will make overburdened with interest risk
that may question its sustainability for the long term period (Serfling, 2016).