This needs to be on HCA and Tenet healthcare....

Assignment Details

Throughout this course, you will prepare a comprehensive financial analysis and proposal (excluding tables, figures, and addenda) that will demonstrate your understanding of key financial concepts, strategies, and practices. After selecting a company to profile, you will construct a comparative financial analysis of your selected company?s financial position with that of a prime competitor, for example, Amazon and Netflix, Microsoft and Oracle, or Bank of America and JPMorgan Chase & Co. Following the nine-step assessment process detailed in Assessing a Company?s Future Financial Health, your financial analysis and proposal will be composed of four separate component assignments in Topics 2, 4, 6, and 8.

For this assignment, apply the next three steps of the nine-step assessment process detailed in Assessing a Company?s Future Financial Health (i.e., Step 5: External Financing Need, Step 6: Target Sources of Finance, and Step 7: Viability of 3-5 Year Plan) to compose further assessment of the company/competitor pairing analysis as below:

1. Current financial plan. Interpret current equity valuations in order to recommend strategic solutions regarding future financial goals. Consider how stock splits and stock dividend allocations can impact the plan.
2. Future external financing needs. To support growth, companies need capital, and external financial needs are vital any firm?s future success. Describe external financing needs sufficient to support your ongoing analytical assumptions and pro forma financial statements for your chosen company and competitor.
3. Access to target sources of external financing. You will need to consider the amount of financing, timing, length of time required, and deferability of financing options.
4. Viability of a 3-5 Year Plan. Assess the consistency of the plan with the firm?s goals, and the achievability of both the operating plan and the financing plan you are proposing.

Prepare this assignment according to the guidelines found in the APA Style Guide, located in the Student Success Center. An abstract is not required.

This is an ongoing research assignment. I will attach the last assignment for your review, thanks.

1 FIN- ANALYSIS Financial Analysis and Proposal Component 2 Shad Bowen Grand Canyon University: FIN 650- Managerial Finance July 20, 2016 2 FIN- ANALYSIS Financial Analysis and Proposal Component 2 HCA Holdings has been one of the top performers in the industry, along with Universal Health Services, in terms of EBITDA margins. However, the valuation multiples of HCA Holdings are depressed when compared to that of Universal Health Services. This discount can be attributed to the negative equity and risk of legal penalties that the company faces. Also, with insiders gradually reducing their holdings in the company, investors continue to be uncertain about HCA's future performance. (M, Patrick 2014) Strategies Employed by HCA The strategy of focusing on emergency care, urgent care, and specialty hospitals is expected to boost HCA's operational performance. In addition, improving Medicare rates and increasing relationships with insurance exchanges will also improve revenues. The increased focus on outpatient clinics and the services provided will also improve profitability. As a result of high operating performance, despite high debt levels, HCA Holdings stock is expected to perform better than most of its industry peers. (M, Patrick 2014) Negative equity results in a lower credit rating and higher interest expenses. Both Fitch and Moody's rated HCA Holding's long-term debt as non-investment grade. With the company planning to raise $1.5 billion in senior secured notes, a further deterioration in the debt ratios can lead to further rating downgrades. Considering 30-days investment horizon, Tenet Healthcare Corp is expected to generate 1.85 times more return on investment than HCA Holdings. However, Tenet Healthcare is 1.85 times 3 FIN- ANALYSIS more volatile than HCA Holdings Inc. It trades about 0.19 of its potential returns per unit of risk. HCA Holdings Inc is currently generating about 0.06 per unit of risk. If you would invest 2,765 in Tenet Healthcare Corp on June 20, 2016 and sell it today you would earn a total of 316.00 from holding Tenet Healthcare Corp or generate 11.43% return on investment over 30 days. Debt Coverage Ratios Debt to earnings before interest, tax, depreciation, and amortization (or EBITDA) ratio indicates if a company is capable of servicing its debt from its operating income. The company's finances are little different from those of Tenet Healthcare Corp (NYSE:THC). During the last quarter it brought just 7.5 cents in every dollar down to operating income, and only half of those escaped tax. Total revenue is only 10% better than it was in 2015, and it actually has more debt than assets. Operating cash flow, however, is approaching $4.5 billion, and the slope of that improvement is better than Tenet's. Based on profitability, THC has better gross profit margin than HCA. However, HCA has higher operating margin and return on assets ratios. THC has a return on equity of more than 11% whereas HCA has this ratio being negative. THC uses high proportion of debt in financing its operations and generally HCA is more financially sound than THC. Strategies Employed by THC THC intends to continue to market and expand THC's revenue cycle management, patient communications and engagement services, and management services businesses. They believe that its success in growing THC and increasing its profitability depends in part on its success in executing the following strategies: (1) attracting as new clients hospitals and other healthcare 4 FIN- ANALYSIS providers who currently handle their revenue cycle management processes internally; (2) generating new client relationships through opportunities from USPI and Tenet's acute care hospital corporate development activities; (3) expanding revenue cycle management and valuebased care service offerings through organic development and small acquisitions; (4) leveraging data from tens of millions of patient interactions to capture new opportunities and service the value-based care environment to drive competitive differentiation; and (5) developing services for its Ambulatory Care segment, leveraging USPI's capabilities. They are committed to providing the communities they serve with high quality, cost-effective healthcare while growing its business, increasing its profitability and creating long-term value for its shareholders. They believe that their success in increasing their profitability depends in part on their success in executing the strategies and managing the trends discussed below. (www.sec.gov 2015) Core Business Strategy They are focused on providing high quality care to patients through our hospitals and outpatient centers, and offering an array of business process solutions primarily to healthcare providers through THC. Quality Commitment They are continuing to make significant investments in equipment, technology, education and operational strategies designed to improve clinical quality at all of their facilities. In addition, they continually collaborate with physicians to implement the most current evidence-based 5 FIN- ANALYSIS medicine techniques to improve the way they provide care, while using labor management tools and supply chain initiatives to reduce variable costs. 6 FIN- ANALYSIS References Brigham, E. F., & Ehrhardt, M. C. (2014). Financial management: Theory and practice (14th ed.). Mason, OH: South-Western. EDGAR Online-Glimpse, (Feb 2016). Headline: 10-K, Tenet Healthcare Corp. Management's discussion and analysis of financial condition and results of operation. M, Patrick. (Dec 2014). Comparing HCA Holdings with peers. Retrieved from: http://marketrealist.com/2014/12/comparing-hca-holdings-peers/ United States Securities and Exchange Commission. (Dec 2015). Tenet Healthcare Corporation. Retrieved from: https://www.sec.gov/Archives/edgar/data/70318/000155837016003350/thc20151231x10k.htm