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Financial Analysis of Universal Health Services Corporation

Financial Analysis

Financial Analysis of Universal Health Services Corporation

Introduction

Financial analysis helps the investors and creditors to know about various important variables of the company. It gives insight about how the company is performing and its creditworthiness. Investors and creditors are more inclined towards their returns & repayments respectively. They have to gauge the performance, repayment capacity and the ability of the company to pay rewards to investors before they take any material interest in the company. Financial analysis assists stakeholders to understand the company using ratio analysis & common-size statements i.e. horizontal & vertical analysis (Damodaran, A., 2002).

This assignment is dedicated at explaining the financial and accounting analysis of Universal Health Services Corporation. We have classified this assignment into three parts; first part explains the business strategy of the underlying company, second and third part of the assignment explains its accounting and financial position respectively (Devaraj, S., &Kohli, R., 2000). In third part prospective analysis of the company is presented.

Discussion

Section 1 (Analysis of Statement)

Financial health of Universal Health Services Corporation is given

Income Statement Analysis

From the income statement we can comment that the company has increased its gross profit, gross revenue and net profit in 2012 as compared to its previous years. Operating position of the company is good and stable, which is a good sign for the stakeholders.

3 Years Income Statement of Universal Health Services Corporation

2012

2011

2010

Total Revenue

\$ 6.961400

\$ 6.760222

\$ 4.900147

less: COGS

\$ 0

\$ 0

\$ 0

Gross revenue\profit

\$ 6.961400

\$ 6.760222

\$ 4.900147

Less: Total Expenses

R & D

\$ 0

\$ 0

\$ 0

\$ 5.716393

\$ 5.575883

\$ 4.177503

Others Expenses

\$ 0.302426

\$ 0.287211

\$ 0.216930

Net Operating Income or Loss

\$ 0.942581

\$ 0.897128

\$ 0.505714

Total Income generated from Continuing Operations

EBIT (Earnings Before Interest And Taxes)

\$ 0.942581

\$ 0.897128

\$ 0.505714

Net, Interest Expense

\$ 0.178918

\$ 0.200792

\$ 0.077617

Income prior to Tax deduction

\$ 0.763663

\$ 0.696336

\$ 0.428097

Income Tax Expense

\$ 0.274616

\$ 0.247466

\$ 0.152302

Minority Interest charges

\$ -0.045601

\$ -0.050703

\$ -0.45612

Net Income From Continuing Ops

\$ 0.443446

\$ 0.398167

\$ 0.230183

Net Income

\$ 0.443446

\$ 0.398167

\$ 0.230183

(All Values are quoted in million)

Balance Sheet Analysis

We can elucidate the financial health of a company after analyzing its balance sheet, which is given below. It can be seen from the balance sheet that company has increased its total current asset and total asset in 2012 as compared to preceding year. In addition, total liability and total of the company has also increased. The overall financial position of the company is good, and has potential for all stakeholders.

3 Years balance Sheet of Universal Health Services Corporation

Assets

2012

2011

2010

Total Current Assets

Cash & Cash Equivalents

\$ 0.023471

\$ 0.041229

\$ 0.029474

Account Receivables, net

\$ 1.171658

\$ 1.078126

\$ 0.958654

Total Inventory

\$ 0.099000

\$ 0.096775

\$ 0.094330

\$ 0.113367

\$ 0.148775

\$ 0.248658

Total ( Net) Current Assets

\$ 1.407496

\$ 1.364905

\$ 1.331116

Plant, property, land & Equipment

\$ 3.382235

\$ 3.287980

\$ 3.252967

Goodwill value

\$ 3,036,765

\$ 2,627,602

\$ 2.589914

\$ 0.298459

\$ 0.272978

\$ 0.245279

Deferred Long Term Asset Charges

\$ 0.075888

\$ 0.111780

\$ 0.108660

Total Assets, net

\$ 8.200843

\$ 7.665245

\$ 7.527936

Total Liabilities

Current Liabilities (CA)

Total accounts Payable

\$ 0.890619

\$ 0.832125

\$ 0.819334

Short & Long Term Debt

\$ 0.002589

\$ 0.002479

\$ 0.003449

\$ 0.000850

\$ 0.002329

\$ 0.003516

Total Current Liabilities

\$ 0.894058

\$ 0.836933

\$ 0.826299

Long Term Debt

\$ 3.727431

\$ 3.651428

\$ 3.912102

Other Liabilities

\$ 0.395355

\$ ...