a financial analysis of stryker

Stryker Medical was founded by Dr. Stryker, an innovative orthopedic surgeon. The organization’s mission is to be a world leader in the medical field. Stryker’s goal is to develop, produce, and deliver goods and services that help hospitals and doctors provide high-quality health care at a reasonable cost.

Stryker Medical is a global leader in the development and manufacture of medical and surgical devices. Notably, the company manufactures surgical instruments, endoscopic devices, emergency services, nursing treatment, hospital beds, and stretchers, among other things (Rogers, 2013). Additionally, the institution also offers patient rehabilitative therapy in some of its subsidiaries like Physiotherapy associates.

Stryker also engages in the clinical treatment of bones in its subsidiaries. Moreover, the organization is divided into ten operational units which include; Stryker Europe, Homemedica Osteonics, Endoscopy, Medical, Pacific, Biotech, Americas, and Matsumoto Medical Instrument. Subsequently, each operational unit operates independently of a system well constituted by its products and services.

Ratio Analysis of 3 Year Trend

Ratio

2016

2015

2014

PROFITABILITY RATIOS

Profit Margin

15%

14%

5%

Return On Assets

8.98

8.47

3.08

Return On Equity

17.25%

16.91%

6%

ASSET UTILIZATION

Receivables Turnover

6.24

6.15

6.26

Total Asset Turnover

0.62

0.59

0.58

LIQUIDITY RATIOS

Current Ratio

2.5

2.27

1.95

Quick Ratio

1.85

1.8

1.59

DEBT UTILIZATION RATIOS

Debt To Total Assets

0.72

0.47

0.46

Times Interest Earned

9.43

17.06

11.27

Effectiveness of Financial Management

Financial management is a board concept. It encompasses planning, controlling, monitoring, and organizing financial resources to meet the objectives of the company. The sound organizational plan helps in achieving an effective financial management. Effective management can also be obtained through systematic approach by the managers in the companies (Kuzmina, 2014).

Stryker Corporation’s Stock from an Analysis Perspective

The Stryker Corporation’s according To Newyork Stock Exchange (NYSE)

Price Earnings Ratio

Stryker price earning for FYR 2016 was 5.8 whereas in the subsequent year 2017 3rd quarter is 6.45.

An Opinion of Whether Or Not the Firm Is Trying To Maximize Wealth

The firm is trying to maximize wealth.Stryker repatriated $700 million of cash from outside the US until 3Q15 and is further expected to repatriate an additional $1 billion to the United States. The repatriated funds were partially used for the settlement payments of hip and knee implants as mentioned above. Stryker prefers to deploy the significant portion of the capital available for strategic M&A (merger and acquisition) opportunities to expand its product portfolio and accelerate growth. Further, it continues to make timely debt repayments to maintain reasonable debt levels.

In 2015, Stryker identified Europe as an under-tapped potential growth area and established a transatlantic operating model for the reorganization and restructuring of its European operations. As part of the initiative, Stryker established a regional headquarter in Amsterdam and made significant investments in sales and marketing activities for the region. This drove up SG&A (selling, general, and administrative) expenses of the company. The company, however, expressed confidence in its ability to leverage these costs in 2016 and have higher growth due to improved operational efficiencies and higher revenues.

The Ability of Raising Capital

Stryker has successfully maintained lower debt levels through efficient debt management. Its current debt-to-equity ratio of 0.45 is below the industry average and signifies a strong capital structure with lower debt levels. Due to lower leverage, the company gains the ability to raise capital through lower cost of capital.

Perform an Assessment of the Outstanding Bond Issue

Issue Name

Issue Date

Maturity Date

Years Remaining

Currency

Amount Outstanding ($M)

SYK 1.3 04/01/2018

03/25/2013

04/01/2018

0.46

USD

600

SYK 1.8 01/15/2019

01/18/2017

01/15/2019

1.25

USD

500

SYK 2.0 03/08/2019

03/10/2016

03/08/2019

1.39

USD

750

SYK 4.375 01/15/2020

01/15/2010

01/15/2020

2.25

USD

500

Issue Name

Issue Date

Maturity Date

Years Remaining

Currency

Amount Outstanding ($M)

SYK 4.1 04/01/2043

03/25/2013

04/01/2043

25.46

USD

400

SYK 4.375 05/15/2044

05/01/2014

05/15/2044

26.58

USD

400

SYK 4.625 03/15/2046

03/10/2016

03/15/2046

28.41

USD

1000

Recommendations of Improving the Firm’s Financial Position

Majority of the organizations are concerned with financial management. Managers and executives are striving on how to effectively and efficiently use the company’s resources. This article, therefore, recommends that top management in companies should streamline the organization’s culture to be in line with the mission statement as a move to the achieve company’s objectives. Consequently, the executives should be passionate as they drive the objectives of the company. Moreover, the company should also invest in research and development (R & D) (Jones, 2014).

References

Jones, A. (2014) .Stryker keeps moving with Strong Research Commitment, Investor’s Business Daily.

Rogers, D. (2013). Stryker Skillfully Handles a Steady Run of New Products,“ Investor’s Daily.

Kuzmina, M. (2014). Improving Financial Management System for Multi-business companies” .Harvard University Press.