ASSIGNMENT QUESTION

In this section you will analyse the company's capital structure and leverage policy. Your discussion in this section should include but not be restricted to the following: 

COMPANY NAME: Ramsay Health Care Limited (RHC)

1. Historical Company Financing/Leverage Analysis and Peer Leverage Analysis. (2 pages) 

a. You should document the financing and leverage history of the company and characterise the company's historical (and current) leverage policy using:

i. Recent trends in the use of debt and equity

ii. Recent financing activities of the firm: debt and equity issues, placements and share buybacks: 

• All the information (for at least the past ten years) mentioned above must be presented in a table and then trends should be discussed 
• You should also use graphs to facilitate your discussion as necessary 

iii.  Current and recent history of leverage and interest coverage ratios 

• All the information (for at least the past ten years) mentioned above must be presented in a table and then trends should be discussed 
• You should also use graphs to facilitate your discussion as necessary 

iv.  Management discussions about the firm's leverage policy (if available in the annual reports).

2. Based on the above analyses, does the company have a target leverage ratio?

The report will be marked on both its content (discussions/analyses/arguments) and the quality of its write-up (organisation, clarity, conciseness, grammar and punctuation).

Ramsay Healthcare 

Ramsay Health Care is a private chain of healthcare providers across different countries around the globe. With quality services specializing in rehabilitation, surgeries and psychiatric care, the company has the largest foothold in Australia now slowly diverting to countries like UK, Malaysia, France, etc.

Historical Leverage Policy

While assessing the leverage ratio of the company, the debt levels are assessed relative to the cash operating profits (*EBITDA) of the Group that are used to service debt. (Hildebrand, P.M., 2008). There needs to be a balance between the various facets of the leverage ratio to ensure that the risks and returns are well assessed and the greed does not make the company extremely fragile in terms of its financial performance.

(Some parts of the solution has been blurred due to privacy protection policy)