Contemporary Strategy Analysis For Text And Cases Of Ramsay Health Care Limited

Directors Reports

The Ramsay Health Care Limited company caters its products and services in the health and wellbeing sector. The company is the global operating unit of different hospital chains and group the company has under the segment. The company operates around 235 hospital services in different parts of the country and geographical boundaries. The company operates and has a several exposures in different field of healthcare services like it provides treatment center and facilities, the rehabilitation centers and others psychiatric units and other practicing units like the nursing colleges for young professional across six different countries. The company has its wide operation and group of hospital in the popular countries like United Kingdom. France, Italy, Malaysia, Indonesia and Australia are the countries under which the company has its group of hospitals operating (Duckett and Willcox 2015).

The strong and active employee base for the company has provide the company with an edge solution to perform better in the operations of the company. The Financial report for the year 2017 was selected for the company for the assessment of financial analysis and determine the financial position of the company. The directors report explained under the assignment has given us an brief idea about the company overview in terms of strategy the company is deploying the various compliance procedures and the alignment of growth and sustainable growth from the view context of the management of the company (Griffin and Wright 2015).

The Auditors Report had some crucial information about the company recording and classification of accounting transaction that occurs on the daily transactions of the company. Ratio Analysis was the key analytical tool used to perform the financial analysis for the same (Bongini, Nieri and Pelagatti 2015).

The key dominating aspect of the annual report is the financial report of a company. The financial report has given the overview of the company’s operation from the standpoint of performance of the company. The breakdown of financial report of the company shows the performance of the company via the different components of the company’s financial data. The Cash flow statement, income statements and the balance sheet of the company gives a detailed analysis on company operating investing and financing activities of the company. It is crucial to note that the Ramsay Health Care has shown considerable improvement when the same is mapped by the financial performance of the company (Libby 2017).

The director’s report for Ramsay Health Care Limited gives a detailed analysis for the company corporate governance and financials and the accounting standard for the company. The list of directors and there shareholding with the company is given in the report. The disclosure of the company in terms of the director’s contracts or agreement with the company is disclosed. The directors of the company has discussed the operating and financial review for the company in the financial and reporting year 2017. The principal operations and the primary activities of the company performance and the strategy and the management ideas applied for the same is discussed (Grant 2016). The inorganic growth strategy for the company was discussed under the head the mergers and acquisitions of the company and there reason for the potential growth was explained under the director’s report (O’Donnell, et al. 2015). The financial review for the company was done in context and view of the performance of the company. The revenue for the company has shown a significant and considerable improvement in the field of revenue from services. The key financial indicators like the EBIT and the Operating margin for the Ramsay Health Care has shown a considerable improvement. The company performance according to the geographical location that is the sector or the different group analysis was performed. The net profit margin for the company showed an increase of about 8.60% from the year 2016-17. The total assets of the company has shown an increase of about 1.1% from the financial year 2016-17 the fall in the total liabilities of the companies by about 3.5% from the year 2016-17. The fall in total liabilities of the company was accompanied by the reductions in the total borrowing of the company. The repayment to bank loans and the bondholders of the company was done when the profit of the company has shown sustainable improvements in the form of increasing net profit. Since interest expense was one of the major component in the income statement of the company has reduced the same by repaying and reducing the debt of the company. The remuneration report for the company gave a breakdown and the divisions of remuneration paid to the directors of the companies in the form of salaries and benefit paid (Izquierdo, UVA and ULE 2015).

Auditors Report

The Auditor for the Ramsay Health Care Company is Ernst and Young for the financial year 2017. The Auditor report of Ramsay Health Care has shown that the financial statements of the company for the year2017 financial year gives a true and fair view about the company’s financial data presented.  The financial data presented by the company represents a true and a fair view of the company’s financial positions. The standards that is the accounting standards for the Ramsay Health Care Ltd is governed by the Australian Accounting Standard Bodies. The financial data of the company meets the guiding principal rules and regulations laid by the accounting standard bodies. The key audit matters involved and studied by the auditors of the company is the concern about the financials components like the Impairment of Goodwill, Provisions for Insurance and the recognition of the revenue doe by the company (Bianchi 2017). The director’s duty and there responsibility were some of the key aspects discussed in the report (DeZoort and Harrison 2018).

The revenue recognition policy by the company is such that the company recognizes revenue on the base of fair value of the amount of considerations received by the company. The reliability of the economic benefits flowing to the company is the key aspects the company looks before recognizing any amount as a sources of revenue. The primary activity of the company that is the revenue from patients in the form of services had been static and showed a slight growth of about 0.24%. The primary reason for the change in other income was that the other income was generated from non-core business activity of the company (Fang and Li 2015).

Table 1: Revenue Decomposition

(Source: Ramsayhealth.com 2018)

The cash flow of the activities of the company saw changes due to decreasing profit margin in the operating part of the company. The repayment of debt and borrowings of the company mainly observed the decrease in the finance cost (Girish and Desai 2017).

Table 2: Cash Flow Statement

(Source: Ramsayhealth.com 2018)

The retained profit for Ramsay Health Care Ltd is around 48% the company retains around as a possible source of deployment of internal sources of funds. The company had around 261.4 cents as its Core Earnings per share in the financial year 2017 while the amount was around 231.4 cents, which shows a growth in the earning per share of about 13% from the year 2016-17 (Smith et al. 2018).

Cash Flow Activities

The current loans and the borrowing of the company has shown a significant decrease of about 27% decrease the step was taken by the company to reduce the loans and borrowings of the company which were giving an impact on the company’s net profitability. Whereas the non-current loans and borrowings of the company has shown a decrease by about 2% (Andrés, Arce and Thomas 2017).

Table 3: Retained Earnings and Loans and Debentures of Ramsay Health Care Ltd

(Source: Ramsayhealth.com 2018)

The Financials of Ramsay Health Care was taken into account to perform the ratio analysis for the company. The ratios performed while using the financial data of the company is the liquidity ratio of the company, which includes the quick and current ratio, and the cash flow ratio. The Assets turnover ratio and the return on equity ratio, which are key and important aspects of determining the financials of the company was taken into account while performing the ratio analysis for Ramsay Health Care Ltd (Grant 2016).

Table 4: Ratio Analysis of Ramsay Health Care Ltd

(Source: Ramsayhealth.com 2018)

Conclusion

The Ramsay Health care company operations and the return it deploys to the stakeholders of the company is healthy. The sustainability factor was seen in the company’s financial operation. There was no discrepancies reported in the Auditors Report for the company. The key accounting changes were noted and discussed under the project and the classification of the expenses were given a justifiable base for the same. The financial overview of the company states the growing profitability via the primary operations of the company that is through revenue from patients services shows the strong financial position of the company.

Reference

Andrés, J., Arce, Ó. and Thomas, C., 2017. Structural reforms in a debt overhang. Journal of Monetary Economics, 88, pp.15-34.

Bianchi, P., 2017. The economic importance of intangible assets. Routledge.

Bongini, P., Nieri, L. and Pelagatti, M., 2015. The importance of being systemically important financial institutions. Journal of Banking & Finance, 50, pp.562-574.

DeZoort, F.T. and Harrison, P.D., 2018. Understanding auditors’ sense of responsibility for detecting fraud within organizations. Journal of Business Ethics, 149(4), pp.857-874.

Duckett, S. and Willcox, S., 2015. The Australian health care system (No. Ed. 5). Oxford University Press.

Fang, L. and Li, H., 2015. Centralized resource allocation based on the cost–revenue analysis. Computers & Industrial Engineering, 85, pp.395-401.

Girish, S. and Desai, K., 2017. IMPACT OF CASH FLOW FROM OPERATING AND FINANCIAL ACTIVITIES INFORMATION ON SHARE PRICE: EMPIRICAL EVIDENCE FROM NIFTY PHARMA INDEX COMPANIES, INDIA. International Journal of Management Research and Reviews, 7(11), pp.1029-1033.

Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.

Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.

Griffin, P.A. and Wright, A.M., 2015. Commentaries on Big Data’s importance for accounting and auditing. Accounting Horizons, 29(2), pp.377-379.

Izquierdo, M., UVA, I.P. and ULE, R.R., 2015. KEYNESS ACROSS BUSINESS GENRES: THE AUDIT REPORT AND THE DIRECTORS’REPORT.

Libby, R., 2017. Accounting and human information processing. In The Routledge Companion to Behavioural Accounting Research (pp. 42-54). Routledge.

O’Donnell, K., Hicks, B., Streeter, J. and Shantapriyan, P., 2015. Getting it right: directors’ assessment of information. Managerial Auditing Journal, 30(2), pp.117-131.

Ramsayhealth.com. (2018). Available at: https://www.ramsayhealth.com/common/emag/rhc/annualreport2017/pubData/source/RHCAR2017.pdf [Accessed 19 Sep. 2018].

Smith, I.J., Tether, B., Thwaites, A., Townsend, J. and Wynarczyk, P., 2018. The performance of innovative small firms: a regional issue. In New Technologies and the Firm (pp. 54-82). Routledge.

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