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Please solve the questions below.

Please solve the questions below. thank you

Using the information presented in the Financial Statements of United Health Care, a major HMO, compute financial ratios for 1994 and 1995 and discuss some of the primary observations that you would conclude regarding the financial performance of the firm. Provide an overall evaluation of the financial position of this company.

 

United Healthcare Financial Ratios

                                                                        Health Plan Median                         2017      2016      2015      

Liquidity

               Current                                                                1.32                                       ?             ?              .93

               Days in Receivables                                           22.5                                    ?             ?             19.8       

               Days Cash on Hand                                           89.9                                    ?             ?             53.6

Capital Structure

               Equity Financing %                                           48.9                                       ?             ?             60.7%

               Long Term Debt to Equity %                           13.0                                       ?             ?              3.67%

               Cash Flow to Total Debt %                              15.0                                       ?             ?             37.7%

               Times Interest Earned                                       13.1                                    ?             ?             109.5

Activity

               Total Asset Turnover                                         1.55                                       ?             ?             1.74

               Fixed Asset Turnover                                        16.8                                       ?             ?             24.6

               Current Asset Turnover                                    2.88                                       ?             ?             5.07

Profitability

               Total Margin %                                                  3.6                                         ?             ?             6.81

               Return on Equity %                                            11.6                                       ?             ?             19.6

 

Income Statement (000$)

 

Fiscal Year Ending                                                             12/31/17                12/31/16                12/31/15

 

Net sales                                                                               5,670,878             3,768,882             3,115,202

Cost of goods                                                                      3,930,933             2,643,107             2,236,588

Gross profit                                                                          1,739,945             1,125,775              878,614

 

Selling, general and administration                               1,030,906              555,649               491,635

 

Income before depreciation and                                     709,039               570,126               386,979

amortization

Depreciation and amortization                                      94,458                64,079                50,628

Nonoperating income                                                        -153,796               -35,940                   122

Interest expense                                                                       771                   2,163                  3,046

Income before taxes                                                          460,014                467,944                333,427

Provision for income tax                                                 170,205                177,822                119,379

Minority interest                                                                   3,845                  1,983                   1,970

Net income before extraordinaries                                 285,964                288,139                 212,078

Extraordinary items and discounted

Operations                                                                           NA                         1,377,075             NA         

Net income                                                                          285,964                1,665,214             212,078

 

 

United Healthcare Corporation Balance Sheet (Data in Thousands)

 

Fiscal Year Ending                                             12/31/17               12/31/16                12/31/15

 

Assets

Cash                                                                      940,110                1,519,049             228,260

Marketable securities                                         863,815                 135,287                172,610

Receivables                                                         550,313               167,369                169,075

Other current assets                                           512,883               86,510                 44,023

Total current assets                                            2,867,121             1,908,215             613,968

 

Prop. Plant, Equipment                                    417,166                273,431                215,628

Less Accumulated Depreciation                     149,514                110,834                 88,886

Net Prop and Equipment                                 267,652                162,597                126,742

 

Investment in Subsidiaries                               1,274,470             1,115,054             768,563

Intangibles                                                           1,751,743             303,613 278,081

 

Total assets                                                          6,160,986             3,489,479             1,787,354

 

Liabilities

Accounts payable                                              1,236,217             470,591                535,863

Accrued expenses                                               566,770              122,993                52,027

Other current liabilities                                    631,009                70,718               70,844

Total current liabilities                                      2,433,996             664,302                658,734

 

Noncurrent capital leases                                38,970                 29,721               39,099

 

Total Liabilities                                                  2,472,966              694,023               697,833

 

Preferred stock                                                   500,000               NA                           NA

Common stock net                                                1,752               1,728                   1,691

Capital surplus                                                   822,429                752,472                659,359

Retained earnings                                                             2,358,640            2,085,056             424,468

Other equities                                                          5,199               -43,800                -108

Shareholders equity                                           3,688,020             2,795,456             1,085,410

 

Total liability and net worth                             6,160,986             3,489,479             1,783,243

 

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