Financial Analysis

Intermountain Healthcare
Balance Sheet that I used: http://emma.msrb.org/EA589562-EA460744-EA856764.pdf
I was unable to copy and paste it so that I could highlight the numbers but if you need to know
which numbers I used you can press ctrl f on the pdf and type in my numbers to see what I used.
Here are the numbers (in millions) for my calculations:

Current Ratio: 2012=1676.3/1359.7=1.233, 2013=1755.9/1342.9=1.308

Debt to Net Worth Ratio: 2012=(1359.7+1100.7)/4242.3=0.5799,

2013=(1342.9+1184.9)/5788.7=0.4367

Average Collection Period: 2012=(473/4700.3)*365=36.653,

2013=(474.9/5041.5)*365=34.382

Assets to Sales: 2012=7553.2/4700.3=1.607, 2013=8682.4/5041.5=1.722

Return on Sales: 2012=(4700.3+218.4)/4700.3=1.046, 2013=(5041.5+371.4)/5041.5=1.074

Return on Assets: 2012=635.8/7553.2=0.084, 2013=766.3/8682.4=0.088

MEMO
Date: 17 Nov 2014
To:

Jeremy Jostad

From: Kacee Baucom

RE:

Intermountain Healthcare Financial Analysis

Ratio
Current Ratio
Debt to Net Worth
Average Collection Period
Assets to Sales
Return on Sales
Return on Assets

2012
1.233
0.579
36.653
1.607
1.046
0.084

2013
1.308
0.437
34.382
1.722
1.046
0.088

Intermountain Healthcares Financial Situation:

Intermountain healthcare is in good financial health. Their current ration, debt to net worth,
average collection, return on sales, and return on assets, are all moving in the ideal direction. The
only ratio that is moving in the wrong direction is our assets to sales. Overall our condition is
improving. We know this by looking at the current ratio. From 2012 to 2013 the current ratio
increased by about 0.1 million dollars. This means that our assets are being used to pay off
liabilities. The other clear indication of improvement is our debt to net worth ratio. This ratio
decreased by about 0.15 million which means we are not using debt to finance our assets.
Conditions Affecting our Situation:
Internal
The cost of healthcare continues to increase as technology advances and becomes more
central to each process. However, advances in technology also help with making our
company more efficient as a whole.
External
The economy is an external factor that effects our situation because everyone needs
healthcare regardless of how the economy is doing, but depending on everyones current
financial situation will determine if they are able to pay their healthcare bills or not. Other
external factors include simply how sick people are. If there is an epidemic of the
common cold, or if it is flu season, then our revenue will increase.

One Year Action Plan:

My recommendations for this next year are for Intermountain healthcare to continue
giving charity care to the poor and homeless. Not only does this improve our image among
consumers, but it saves us a lot of money from tax benefits. I also recommend decreasing
marketing costs. Since Intermountain Healthcare is so popular and well known already, we
should decrease marketing so that we dont have to use our assets to bring in consumers.
Potential Barriers to the Action Plan:
Since Intermountain gives charity care to the poor and homeless (meaning our services are free
to these people), it leaves room for people to abuse their services. This could be a potential
barrier that would decrease our efficiency and revenue. Another barrier that could come from
decreasing our marketing strategies might be competitors gaining popularity through their
marketing efforts.