Вы находитесь на странице: 1из 3

MANAGEMENT 120A: SPRING 2015

INTERMEDIATE FINANCIAL ACCOUNTING

CASE: RADNET VS ALLIANCE

Whose results to you think read better?

RadNet, Inc. is a national leader in providing high-quality, cost-effective,


fixed-site outpatient diagnostic imaging services through a network of more
than 250 fully-owned and operated outpatient imaging centers. RadNet’s core
markets include California, Delaware, Maryland, Rhode Island, New Jersey
and New York. Together with affiliated radiologists, and inclusive of full-time
and per diem employees and technologists, RadNet has a total of
approximately 6,300 employees. (RDNT)

Alliance HealthCare Services is a leading national provider of


diagnostic radiology and radiation oncology services. With over 30
years experience, our business model is based upon partnering
with hospital and healthcare providers to maximize the quality of
care, operational efficiency and profitability of these essential
service lines, which typically account for a significant portion of their
revenues. 

Instructions & Requirements:

Your group has been hired to analyze the performance of these companies, specifically; they would
like to know what has happened to the companies over time and in relation to its competitors.
Further, they would appreciate any suggestions you have as to how to improve the companies’
performances.

You decide to approach this in two steps. In the first step you’ll perform a competitive analysis to
determine how each has been performing relative the other. In the second step, you’ll analyze both
companies most recent financial report in order to evaluate their individual performance from one
BERGES 1
year to the next. You will have to obtain the financial statements via the internet at www.sec.gov/
and may include relevant portions of the statements as an attachment to your report (do not include
the entire 10K or the entire footnotes as attachments).

1. The Competitive Landscape

A. Operating Performance and Profitability


Fill in the table below, comparing the various profit margins of the two companies over the past two
years. Which firm seems to be consistently doing better? Which firms have improved or declined in
performance? What do you learn from this analysis?

Prior Year
Company Total Sales Gross Profit Operating Net Profit Return on Return on
(millions) Margin Margin Margin Assets Equity

Most Recent Year


Company Total Sales Gross Profit Operating Net Profit Return on Return on
(millions) Margin Margin Margin Assets Equity

B. Activity and Efficiency


Examine the turnover ratios of the two companies. Which firm seems to be consistently doing better?
Offer reasons as to why there might be significant differences in the turnover ratios?

Prior Year
Turnover Ratios (in days)
Company Accounts Inventory Accounts
Rec. (use Payable *
net A/R)

Most Recent Year


Turnover Ratios (in days) Growth from prior year
Company Accounts Inventory Accounts Sales Growth in Growth in
Rec. (use Payable * Growth A/R Inventory
net A/R)

*Accounts payable turnover is the number of times that accounts payable are paid during the accounting period. This ratio equals:
Accounts Payable Turnover (X) =[COGS + the increase in inventory (or – the decrease in inventory)] / Avg. Accounts Payable
Similar to the Accounts Receivable and Inventory Turnover ratios, this ratio can also be expressed in days to determine how long, on average, the
company takes to pay its accounts payable.

BERGES 2
C. Financial Position
Assess the liquidity and capital structure of the two firms, using the ratios below. Which firm has
the greatest liquidity? Are their capital structures similar?

Prior Year
Company Current Ratio Quick Ratio Total Assets Debt/Equity Debt/Total
(millions) Assets

Most Recent Year


Company Current Ratio Quick Ratio Total Assets Debt/Equity Debt/Total
(millions) Assets

SUMMARY

Your final report should include a cover page that includes the class name, section number, date and
names of all group members. It should also include a table of contents and an executive summary.
An executive summary is typically a 2-3 page discussion which outlines the main points of the
project and the conclusion. An executive summary does not introduce new information. The main
body of the report should include the following sections: Introduction, Operating Performance and
Profitability, Activity and Efficiency, Financial Position, Industry Comparison, Current Events and
Conclusion. You can also add a section titled “Other Significant information” if helpful to the
report. It can include whatever additional information you feel was helpful in researching the
activity and results of these companies (i.e. cash flow or market performance discussions related to
the companies, additional analysis such as vertical or horizontal analysis) The required ratios are
outlined above and are best presented in an appendix so that they can be done in excel. It is helpful
if you show the work in your calculation not merely the computed ratio so that I can see the items
you included in the numerator and demoninator and provided partial credit where an incorrect
assumption may have lead to the wrong ending ratio. The two most recent 10Ks should be used for
“most recent” & “prior year” data. Review articles, news and recent quarterly reportings on these
companies and consider the various effects these items may have on the future financial forecasts
for the company. Using the ratios, the items we discussed in class and the recent news reports on
the assigned companies, what have you learned about these companies and how do they compare to
the rest of their industry in the areas you have analyzed? What have you learned about the overall
industry as a result of this analysis?

Paper should be no longer then 10-12 pages (not including cover page, table of contents, executive
summary, or attachments for table of ratios, articles, etc…). In some cases a ratio may not be
applicable, should this be the case it should be so noted. Please follow format instructions as
outlined in your syllabus and do not attach this form to your report, instead incorporate the
information into your final product.

BERGES 3

Вам также может понравиться