Discounted Cash Flow and Forces Swot Explanation

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  • Topic: Discounted cash flow, Revenue, Weighted average cost of capital
  • Pages : 23 (4440 words )
  • Download(s) : 36
  • Published : December 12, 2012
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Si Chen Bin Shen Qiyang Tan Yajie Wang Jiaqi Zhang

Copyright © 2012 by Steris’s Group from Weatherhead School in Case Western Reserve University All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. For permission requests, write to the publisher, addressed “Attention: Permissions Coordinator,” at the address below.

Steris’s Group in Case Western Reserve University Cleveland, OH ,44106

Table of Contents
Executive Summary Company Overview
Is Steris Growing or Slowing Healthcare Life Sciences Isomedix Services

5 6
7 8 9 10

Industry Overview
Key Factors Global Expansion Medical Device Innovation Acquisitions Aging Population Government Regulations Operation and Production Costs TWI

12
13 13 14 14 15 16 16 17

Porter Five Forces SWOT Explanation of Forecasts Competitor Analysis Johnson & Johnson Ecolab

18 21 22 23
24 25

WACC

26

3

DCF Multiple Analysis Conclusion Scenarios Appendix References

28 29 30 31 32 39

4

Executive summary
STERIS corp. is a global leader in infection prevention, contamination control, and surgical and critical care technology. It is comprised of three different segments: Healthcare, Life Sciences, Sterilization. Isomedix Contract

Executive Summary
Company Overview Industry Overview Porter Five Forces SWOT Explanation of Forecasts Competitor Analysis WACC DCF Multiple Analysis Conclusion Scenarios Appendix References

This report provides

company and industry analysis,
future expectations of the company and valuation of its stock price using two different methods. The share price is estimated to be

between $50.98 and $57.20. Based on these results, the share price of STERIS is undervalued. Two valuation methods were utilized in order to calculate firm value: Discounted Cash Flow Approach and the Multiples Approach. Johnson & Johnson and Ecolab were used as comparable firms. During the valuation process, variables such as business cycle and government regulations were taken into account.

5

Executive Summary
Company Overview Industry Overview Porter Five Forces SWOT Explanation of Forecasts Competitor Analysis WACC DCF Multiple Analysis Conclusion Scenarios Appendix References

Company Overview
STERIS is one of the world’s dominant infection prevention, decontamination, and surgical and critical care companies, with a large repertoire of first-to-market products and industry-leading service innovations and thousands of customers in more than 60 countries. The Company’s history dates back to 1894 with the founding of American Sterilizer Company. The corporation was founded as Innovative

Medical Technologies in 1985 and renamed STERIS in 1987.
Through strategic acquisitions and continual innovation of new products, STERIS holds one of the broadest portfolios of products in the industry. It stands at the forefront of efforts to prevent infection and contamination in healthcare and pharmaceutical environments, and is broadening its reach with products to meet the needs of defense and industrial markets.

6

Is Steris Growing or Slowing?
Executive Summary
Company Overview Industry Overview Porter Five Forces SWOT Explanation of Forecasts Competitor Analysis *source: Fool.com

WACC We often use accounts receivable (AR) and days sales outstanding (DSO) to judge a company's current health and future prospects. Alone, AR -the amount of money owed the company - and DSO days worth of sales owed to the company - don't show much. However, by considering the trends in AR and DSO, one can sometimes forecast the future. When that red line (AR growth) crosses above the green line (revenue growth),...
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