Case 2 Chesapeake Health Plans Essay

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Cheasapeake Health Plans 1. Their uses of cash were primarily used for paying off debt and investing it in marketable securities. Also they spent some of their cash on fixed assets. Even though their ending cash was lower than the previous year, they were using their cash effectively. 2. Chesapeake is doing very well when compared to the national average. Their total margin increased from the year before and compared to the average was almost 3 points higher. Their total asset turnover was lower than the industry average but it did increase from the year before but about a ¼ of a percent below average. However, since their total margin was high, their ROA was higher than national average by almost double. Their equity multiplier…show more content…
Debt Ratio vi. At 52.2% they have lower leverage than the lowest quartile and this decreased from the year before which is evident on the balance sheet because their LTD decreased by 13 million 4. Hospital vs Insurer Ven diagram g. Hospital vii. Total asset turnover viii. Net patient revenue ix. Good average collection period x. Days in patient accound receivable xi. Net price per discharge xii. Outpatient revenue xiii. Occupancy rate xiv. Low cost per discharge h. Insurer xv. Days premiums receivables xvi. ROE xvii. Current ratio xviii. Debt ratio i. Both xix. The rest xx. Inpatient revenue % 5. Strengths and weaknesses j. Strengths xxi. Total margin xxii. Days cash on hand (very liquid) xxiii. Very high ROE because of good margin and ROA xxiv. Low debt ratio when compared to the industry k. Weaknesses xxv. Low total asset turnover (not bad but when compared to average they are low) xxvi. Didn’t manage expenses that well because even though their revenue went up their expenses went up in comparison xxvii. Lower days cash on hand than the previous year, even though they used that cash well it went down 16 days 6. Recommendations l. Even though they paid off long term debt, might not have been
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