STERIS plc (STE)

Debt-to-capital ratio

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Long-term debt	US$ in thousands	3,120,160	3,018,660	2,945,480	1,650,540	1,150,520
Total stockholders’ equity	US$ in thousands	6,302,160	6,077,200	6,532,360	3,880,990	3,405,360
Debt-to-capital ratio		0.33	0.33	0.31	0.30	0.25

March 31, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $3,120,160K ÷ ($3,120,160K + $6,302,160K)
= 0.33

The debt-to-capital ratio of STERIS plc has exhibited a steady increase over the past five years, indicating an increasing reliance on debt to finance the company's operations and growth. From 2020 to 2021, there was a notable jump from 0.25 to 0.30 as debt made up a higher proportion of the company's total capital structure. Subsequently, the ratio continued to rise to 0.31 in 2022 and remained stable at 0.33 in both 2023 and 2024.

This trend suggests that STERIS plc has been taking on more debt relative to its capital base, which may indicate an evolving financial strategy to leverage debt financing for expansion or investment opportunities. However, the consistent level of the ratio in recent years might indicate a deliberate effort to maintain a certain level of leverage or a cautious approach to managing debt levels.

It is essential for stakeholders to closely monitor the debt-to-capital ratio to ensure the company's ability to meet its debt obligations and to assess the overall financial health and risk profile of STERIS plc.