Create a 4–6 page report that analyzes financial ratios for a company

Create a 4–6 page report that analyzes financial ratios for a company, uses the data to tell the financial story of that company, and concludes with a recommendation on whether the company would be a viable partner based on its financial condition.

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Introduction
It’s essential for senior management to know the financial condition of an organization to make strategic decisions. In this assessment, you will apply the financial management skills learned thus far.

Tell the financial story based on financial statements.
Conduct a financial analysis and identify focus areas for enhancing shareholder value.
Interpret ratio computations that are meaningful and inform business decisions and strategies.
Make three recommendations that maximize shareholder value.
Scenario
Maria Gomez is founder and president of ABC Healthcare Corporation, a company that owns hospitals, ambulatory surgical centers, urgent care centers, and outpatient clinics. She has called on you to review various financial documents and to make recommendations to maximize shareholder value. (This is a fictitious company and does not refer to any actual company.)

Your Role
You are one of Maria’s high-performing financial analyst managers at ABC Healthcare Corporation and she trusts your work and leadership.

Instructions
Create a report that tells the financial condition of this company. As a finance professional, you are expected to:

Analyze the financial ratio analysis, trend analysis, and competitive average analysis provided in financial statements below.

Review the financial ratio analysis—earnings per share (EPS), price-to-earnings (P/E) ratio, and price-to-book (P/B) ratio—for the fictitious company ABC Healthcare, and identify focus areas for enhancing shareholder value.

Conduct trend analysis of the ratios and competitive comparative ratio analysis, using the HCA Healthcare Inc – Valuation web page (ATTAXHED), to the competitor HCA Healthcare, Inc. (an actual company) and describe what they show. (Be sure to scroll down the webpage to see all the information.)

Evaluate the financial information of the firm ABC Healthcare to find its true condition and valuation.

Interpret the ratio computations that inform business decisions and strategies to find the company’s true condition and valuation.
Based on your analysis, what is the company’s financial strength? Is it performing well given industry standards? How does it compare to its closest rival, HCA Healthcare Inc?
Recommend at least three actionable ways to maximize shareholder value for the company based on the financial analysis.
Given your review, how can the company maximize shareholder value? What are focus areas for enhancing shareholder value for the long term? What short-term steps might be necessary for longer-term gains?
In your analysis, you may choose to look at competitive data. You may calculate ratios to gain a true comparison.
Be sure to go into the readings and resources to discover ways to maximize shareholder value.

ABC Healthcare
The CFO for ABC Healthcare Corporation assessed the market value by reviewing its P/E ratios. P/E ratio determines the market value of a stock as compared to the company’s earnings. The P/E ratios for the last three years are listed in the table below. To calculate the P/E ratio, the CFO took the EPS and divided that with the market value. As an example, this means that last year, investors were willing to pay 12.1 dollars for 1 dollar of earnings.

Price-to-Earnings Ratio

Last Year Two Years Ago Three Years Ago
Market Price 83.62 81.62 80.02
Earnings per Share 6.91 7.87 9.15
Price-to-Earnings Ratio 12.1 10.63 9.14

To further assess market value, the CFO looked at book value per share (BVPS). The BVPS ratio is the per share value of a company in terms of the equity available to stockholders. The book values per share over the past three years are listed in the table below:

Book Value per Share

Last Year Two Years Ago Three Years Ago
Market Price 83.62 81.62 80.02
Book Value per Share 199.1 209.05 226
Price-to-Book Ratio .42 .40 .37

The P/B ratio compares a firm’s market capitalization to its book value. It’s calculated by dividing the company’s stock price per share by BVPS. Here, for the last fiscal year, the P/B ratio was 0.42. This explains that investors were willing to pay 0.42 dollar for 1 dollar of book value equity. P/B ratio is an important measure to see how much equity shareholders are paying for the net assets value of the company. P/B ratios under 1 are typically considered solid investments.

Deliverable Format
Remember that you are preparing a professional document meant for executive leadership with limited time.

Title page.
Executive Summary.
Company Background.
Overall Financial Analysis.
Financial Ratio Analysis.
Trend Analysis.
Competitive Comparative Analysis.
Recommendations.
Conclusion.
References.
Appendix (if you have additional data, reports, charts, et cetera, to support your analysis).

Additional Requirements
Written communication: Ensure written communication is free of errors that detract from the overall message and quality.
APA format: Format your paper according to current APA style and formatting.
References: Use at least three scholarly resources.
Length: 4–6 pages of content, beyond the title page, references, and appendices.
Font and font size: Use Times New Roman, 12 point.

Competencies Measured
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and scoring guide criteria:

Competency 3: Apply financial analyses to decision making.
Analyze financial ratio analysis, trend analysis, and competitive average analysis.
Evaluate the provided financial statements of the firm to find its true condition and valuation.
Competency 4: Use data to support evidence-based financial decisions.
Recommend at least three actionable ways to maximize shareholder value based on financial analysis.
Competency 5: Communicate financial information with multiple stakeholders.
Write coherently to support a central idea with correct grammar, usage, and mechanics as expected of a business professional.

Criterion 1
Analyze financial ratio analysis, trend analysis, and competitive average analysis.
Distinguished
Analyzes financial ratio analysis from each category, trend analysis, and competitive average analysis; includes trend analysis going back three years for each ratio.

Criterion 2
Evaluate the provided financial statements of the firm to find its true condition and valuation.
Distinguished
Evaluates the provided financial statements of the firm to find its true condition and valuation; supports evaluation with details and examples to illustrate the strengths and weaknesses.

Criterion 3
Recommend at least three actionable ways to maximize shareholder value based on financial analysis.
Distinguished
Recommends at least three actionable ways to maximize shareholder value based on financial analysis. The recommendations have a strong alignment to data analysis and interpretation, especially the financial information provided (PE, PB, EPS, BVPS, and market price).

Criterion 4
Write coherently to support a central idea with correct grammar, usage, and mechanics as expected of a business professional.
Distinguished
Writing is coherent and consistently appropriate, using evidence to support a central idea and with correct grammar, usage, and mechanics as expected of a business professional.

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