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ACCT 102 - Chapter 14 Financial Statement Analysis Project.pdf

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Robert PickertACCT 102Prf. Richard Walstra2/15/18Chapter 14 Financial Statement Analysis ProjectPharmaceutical companies have been top performers in the healthcare sector in an era ofaging populations, rising health care costs, and the ongoing development of new and extremelyprofitable medicines. Cardinal Health is one of those pharmaceutical companies, however, theyaren’t completely in the clear. According to the extensive analyses, Cardinal Health has someconcerns. Starting with the horizontal analysis, Cardinal Health has experienced a severe declinein liquid cash since the previous year (losing almost 75%). In addition to their loss of cash,Cardinal Health’s net earnings (net income) also dropped by 80% from the previous year,making almost one billion dollars less in income. Although the loss of cash may be temporary,there has been a consistent downward trend of net earnings which is quite concerning for a bigpharma company (it raises red flags).In addition to the previous concerns listed, another consistent trend is their risingexpenses. They’ve continued to incur more costs while earning less net earnings, which is a huge

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Generally Accepted Accounting Principles, Cardinal Health

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