STERIS plc (STE)

Financial leverage ratio

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Total assets	US$ in thousands	11,063,700	10,821,800	11,423,600	6,574,470	5,440,870
Total stockholders’ equity	US$ in thousands	6,302,160	6,077,200	6,532,360	3,880,990	3,405,360
Financial leverage ratio		1.76	1.78	1.75	1.69	1.60

March 31, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $11,063,700K ÷ $6,302,160K
= 1.76

The financial leverage ratio of STERIS plc has been gradually increasing over the past five years, from 1.60 in March 2020 to 1.76 in March 2024. This indicates that the company is relying more on debt to finance its operations and growth. A financial leverage ratio above 1 signifies that the company has more debt than equity in its capital structure. While an increasing leverage ratio can amplify returns on equity when business is booming, it also increases the financial risk associated with the company. It is essential for STERIS plc to carefully manage its debt levels to ensure it maintains a healthy balance between debt and equity financing to support sustainable growth and maintain financial stability.