Essay About 4Hca And Net Salesdebt Ratio53.563.168.8Total Debt

Hospital Corporation of America
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Hospital Corporation of AmericaCase # 4HCA owns and operates approximately 190 hospitals and other healthcare facilities in 23 states, England and Switzerland. HCA provides healthcare services that meet each communitys local healthcare needs. HCA deliver patient care with maximum quality and efficiency. HCA’s focus on quality; streamlining operations; sharing technology, equipment and personnel where appropriate; and using economies of scale when contracting for medical supplies and administrative services.  1979 1980 1981   Profit Margin5.25.74.6net income/ net salesDebt Ratio53.563.168.8total debt/total capitalCurrent ratio1.41.31.4EBIT / IntLeverage Ratio2.81.33.9Total Assets / Total Stockholders EquityHCA going on the way to buy more hospitals to own, and get more contracts to manage other hospitals. HCA prefer to expand into new areas into healthcare services.  Many of the growth was through acquisition, purchase of nonprofit county and older hospitals which give the chance to HCA to grow and expand its business.But I think they should get the point that they have to stop there growth and try to make HCA more profitable company, the more expand they will do that required more cash or equity, but we can find that there current ratio is stable abut there debt ratio is going higher. If they would stop think about more growth for HCA they would focus on how to make more profit for HCA and afford more cash with a good debt ratio, to finance there expand in the future. Also the government tries to cut federal expenses for Medicare that make healthcare business more risky. Consumers would become more prices sensitive.HCA started there business through internal finance with the extra cash, when they had  high profit margin, but we find that the profit margin went from 5.2 in 1979 to 4.6 in 1980. This shows that HCA needs to focus on profitability.When HCA keep it’s expand from year to year, they could not depend on the internal finance and they have to get external finance. That is why there debt ratio 69% pass there target 60% debt ratio. And there debt jump from by 200% from 1980 to 1981. while non of there competitors rise there debt in the same way HCA did. American Medical Int, is the closest to HCA but they have lower debt ratio an a higher assets turn over and almost the same net profit, with less hospitals owned/ managed.