Research Project

Accounting 526 - Accounting for Managers

Fall 2020

HCA Healthcare Inc. Inc. SIC 8062

Purpose:

You will utilize the knowledge you gained in the financial accounting portion of the course to analyze HCA Healthcare Inc. Inc.

Required Information Sources:

SEC's EDGAR database at http://www.sec.gov/edgar.shtml to get the 10-K financial data for the company. Do NOT use any other source. The link above will take you to the database where there is a tutorial on how to use it. The 2019 10-k (filing date 2020-02-230 has the financial data for 2019 and 2018. The 2017 10-k (filing date 2018-02-23) has the financial data for 2017 and 2016.

Key Business Ratios database in TAMUT's library electronic resources has industry ratios. Select SIC code 8062. Use the 'median' ratio for the industry ratio in your report.

• Mergent Online electronic database at TAMUT - Enter the company name in the search box and click 'go'. Click on the blue tabs near the top of the page to get information on executives, company financials, competitors, and industry reports.

Part 1 - Company Profile and Analyses of the Industry - The first section must contain ALL of the following subsections:

• Description of the company
• Brief company history
• Description of the industry (competitors, industry outlook, etc.) - Use Mergent Online electronic database at TAMUT for competitors. Search for HCA Healthcare Inc. Inc. and click on the competitors tab. Use sales revenue to find where HCA Healthcare Inc. ranks in the industry. Do not use any other industry ranking.
• Business segment information (one page) from the 10-k. Segment reporting is required for publicly held entities. I to identify which segments your company is reporting on and give some information on them. This can include financial data for the segments.

Part 2 - Analysis of Historical Financial Data

Perform time-series and cross-sectional analyses of your firm for each of the measures listed below. Time-series analysis compares the same measure for the same company or industry over a period of time (4 years minimum for this project). Cross-sectional analysis refers to a comparison of a company with the industry using the same measure.

The 'current ratio' from this report is shown below. Use the 'median' ratio for the industry ratio in your report. If the current ratios you pull up do not match those below, check the SIC code on the report and the group by classification.

Industry Quartiles 2019 2018 2017 2016

Solvency Medians 1.4 1.2 1.2 1.3

Calculate the ratios for your paper as given in the assignment. These calculations are the ones used by D&B Key Business Ratios and you want the calculations to be the same. Normally you would use average inventory, accounts receivable etc., but that would not be consistent with the industry ratios you are comparing the company with. For information on the ratios, click on the 'help guide' on the upper right of the Key Business Ratios webpage. Next, select download the 'ratio guide'. Download the financial data from HCA Healthcare form 10-ks into excel to compute the company's ratios.

Present the ratios for your paper in the following format:

Ratio - e.g. Current ratio

2014

2015

2016

2017

Company - put your company name here

Calculate from Edgar Financials

Industry

From Key Business Ratios

If you use the % sign is the title of the ratio like the example below, then express 98% as 98 in the table. This is the way the ratios are show in the Key Business Ratios database. You will also have to show your company's ratios this way for it to be comparable.

Total Liabilities/Net Worth %

Company

Industry

98.00

109.50

110.10

If you do not use the percent sign in the table, then express the percentages as .98 or 98%. Be sure to change the industry key business ratios to match.

Total Liabilities/Net Worth (no % sign here)

Company

Industry

98%

109.50%

110.10%

Include the following ratios in your analysis:

• Solvency Ratios

oCurent ratio (total curent assets / total curent liabilities)

oTotal Liabilities/Net Worth % (total liabilities / total equity)

• Efficiency Ratios

oAssets / Sales %

• Collection Period in Days 365/ AR turnover ratio or 365/(net credit sales/accounts receivable)
• Profitability Ratios

oReturn on Assets %(net profit for year / total assets)

oReturn on Net Worth %(net profit for year / equity)

Directly below the table for each ratio discuss:

1) what the ratio measures,

2) how the measure has changed over time for the same firm,

3) how the firm's measure compares with the industry and

4) what these results indicate about the company.

Do not list all of the ratios and then begin the discussion.

Conclusion - The conclusion should be a brief one paragraph summary of your findings.