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Expense of HCA Inc. In 2005 was 22 billion as against 2004's 21 billion or a 3% increase. HFMA's expenses in 2005 and 2004 are 19 million and 17 million, respectively, or 9% increase. Meanwhile, the time lag between payment of purchases and collection of cash sales is referred to as cash cycle. The smaller the number of days cash ties up with the business, the better.
Interlinking the current assets, liabilities and income statements account in the analysis, we can initially assess that HFMA seems to be performing better than HCA. HCA's increase in cash by 23% in 2005 was attributable to cash receipts of $1Billion due to its issuance of common stock. Meanwhile, HFMA's increase in cash by 3% was attributable to sale of its investment, generating $1Million cash receipts. HFMA's revenues in 2005 increased by 14% as compared to last year's while HCA only performed an increase of 4%. HFMA's liquidity is further strengthened by its decrease in receivables by 210,000 or 20%. This may indicate that accounts receivables are collected and their clients/customers are availing their services and pays in cash. Meanwhile, despite HCA's increase in revenue, the Company also increased its receivables by 7%. This shows that although there is an increase in revenue, some of its clients/customers avail their services "on account" which may be paid at a later date, maximizing their credit limit and term, thus, the Company is not being able to maximize its fund.
When we look at the illustration above, we can say that HFMA has better working capital management because it has a total of -150 days cash and operating cycle. Meanwhile, HCA has cash and operating cycle of 43 days. HFMA is performing better because clients/customers are paying earlier than the Company has to pay for the creditors. HCA, on the other hand, has customers/clients who take 48 days longer to pay and the Company has an average 9 days to pay…
This company is well positioned to capitalize on the growing population of older Americans whose children have moved out and are in search of more efficient and cost-effective homes. Like the business model adopted by NVR, Toll also takes advantage of efficiencies in its value chain by developing its properties on land that the company has either acquired and/or developed. For the 5-year period ended October 31, 2004, Toll had
Finance Management (Discussion questions) First student Accounts receivable (AR) Accounts receivable (AR) refers to the means by which companies record sales and send statements and bills to their customers. In simple terms, AR keeps track of the customers' unpaid bills and the company's revenues. When sales are recorded, invoices are sent to customers. Apart from the total debt owed by customers, invoices contain information about discounts offered by the company to customers as
Company audit occurs when there is need to examine the performance of a big company especially the financial and the accounting records over a given period of time. Professionals such as the certified public accountant always do the auditing. The audit of a company is significant in the verification of accuracy particularly in the accounting records. A company like coca cola will need an audit to help in verifying their
Company Critical Elements Business Continuity is a vibrant industry dedicated to identifying, prioritizing and safeguarding critical business functions. From small businesses such as neighborhood bakeries to business titans such as Microsoft, each entity that can name, rate and guarantee the continued functionality of its required systems can survive in crisis. As the following analysis shows, the critical processes of all modern businesses fall into common basic categories that are vital to
Finance Over the last several years, dividend stocks have become an important tool that is helping investors to realize above average returns. According to Paul (2012), these areas have been accounting for 40% of profits on the Dow Jones Industrial Average since 1930. This is because they can provide a number of benefits in assisting investors to realize their long-term objectives with him saying, "Those areas that offer sustainable and growing
Finance Discuss some of the motivations firms have for setting up production facilities in other countries. Will the effect on the host country differ depending upon the motivation? Explain. Will the effect on the source country differ depending upon the motivation? Explain. What relationship might trade barriers (or the lack of trade barriers) have in determining a company's primary motivation for producing abroad? The reasons for the foreign investment are high profit