Research Summary: Financial Health and Stock Exchange Analysis of Steris

Running Head: RESEARCH SUMMARY 1
steris
Research Summary
3/14/2019

RESEARCH SUMMARY 2
Background
The research completely focuses on analyzing the financial health of the company in terms of its
liquidity ratio, current ratio, and leverage or debt-equity ratio. Steris is established as a leading
pharmaceutical company in the healthcare sector. The company is providing medical services for
infection prevention and procedural services. Basically it deals in products and services related to
life sciences.
Financial Health
Liquidity ratios reflect the company’s ability to pay off its liabilities i.e. the amount of cash,
assets turning into cash, for paying both short and long term liabilities. At the same time current
ratio is the ability of the company to pay off its short term liabilities through its current assets. It
is the ratio of current assets to current liabilities. If this ratio would be greater than 1 it means
that the company is financially healthy to clear-off its short term debts. However, a big factor in
analyzing the current ratio is the quality and composition of current assets. The next indicator is
the debt-to-equity ratio. A higher ratio is preferable for the organizations with higher growth rate
to stabilize its business.
Stock Exchange Health
Since the company has registered long term debts in its account books, its current share price is
fixed at US$ 122.38. This is quite surprising as the credit rating of the company hasn’t changed
since 2011. This caused the credit rating company, Moody, to give negative reviews about the
company as it caused Steris to raise additional debts. But despite the company ratings remained
unchanged. Since the company is into processing of variety of medical isotopes that have very
few buyers in the market, the business risk of the company is high. Since the additional debt is