Case Study : Health Management Associates

971 Words Feb 1st, 2016 4 Pages
Introduction
Health Management Associates (HMA), is a company that has 196 acute care hospitals, not including nursing homes and home health agencies in non-urban areas mainly in the southwest (Community, 2015). HMA was designed to serve vulnerable, low income and uninsured individuals. The top focus is quality patient care and patient safety. Their specialties are: strokes, bariatric care, joint replacement and spinal surgery. Their accolades and accomplishments are numerous, however as the newly appointed CFO, my first task is to conduct an internal financial analysis.
Financial Analysis
(Financial statements retrieved from CYS.net)
According to Financial Accounting (2012), financial ratios are useful in determining a company’s financial status, which may not be obvious when looking at financial statements. Some ratios are compared to other companies in the same industry along with the industry average, while others are compared to their own previous years. Following are the results of the ratios used to conduct the analysis in determining Health Management Associates’ financial health.
Liquidity Ratios Current Ratio = $1.76 Profitability Ratios
Profit Margin = 1.74%
Earnings Per Share = $2.95
Price Earnings Ratio = 6.9 Solvency Ratios Debt/Equity Ratio = 5.72 (Ratios retrieved from CYH Competitors on Yahoo Finance)

Liquidity ratios determine the company’s liquid assets to pay off short-term debt. The current ratio shows for every dollar of current…
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