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.

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.

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.
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…