Required: 1) The rubric is seeking to Evaluates the provided financial statements of the firm to find
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1) The rubric is seeking to Evaluates the provided financial statements of the firm to find its true condition and valuation; supports evaluation with details and examples to illustrate the strengths and weaknesses. What is the significance of negative PB values in comparison to ABC/s PB values? How do you calculate the PEG
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HCA Healthcare is ABC Healthcare's largest competitor in the industry; thus a comparative analysis has been conducted based on HCA Healthcare's financial performance for years 2017, 2018, and 2019. HCA Healthcare's pertinent financial ratios are located in Appendix 1-2 and are organized such that they are paralleled to ABC Healthcare's. HCA Healthcare shows year over year increase in market share price, which is an area that ABC Healthcare has struggled with and become stagnant since 2017. Thus, HCA shows a higher EPS at 10.07 which is significantly higher than ABC's at 6.91. HCA shows a positive trend overall in EPS since 2017, though there has been some variability noted. PE Ratio has also shown overall positive gain since 2017, but dipped significantly in 2018. ABC Healthcare has also had improved PE Ratios year over year since 2017 and shows a better and more stable trend than HCA Healthcare in this ratio. ABC Healthcare has a financial advantage over HCA Healthcare in both BVPS and PB Ratio. HCA Healthcare ratios show a clear negative BVPS year over year, which is undesirable and thus creates a negative PB Ratio in return, which is not a valuable tool for analysis. ABC Healthcare has been more successful in overcoming losses and creating general value for its shareholders in comparison to HCA Healthcare (Ross et al., 2021). HCA Healthcare is ABC Healthcare's largest competitor in the industry; thus a comparative analysis has been conducted based on HCA Healthcare's financial performance for years 2017, 2018, and 2019. HCA Healthcare's pertinent financial ratios are located in Appendix 1-2 and are organized such that they are paralleled to ABC Healthcare's. HCA Healthcare shows year over year increase in market share price, which is an area that ABC Healthcare has struggled with and become stagnant since 2017. Thus, HCA shows a higher EPS at 10.07 which is significantly higher than ABC's at 6.91. HCA shows a positive trend overall in EPS since 2017, though there has been some variability noted. PE Ratio has also shown overall positive gain since 2017, but dipped significantly in 2018. ABC Healthcare has also had improved PE Ratios year over year since 2017 and shows a better and more stable trend than HCA Healthcare in this ratio. ABC Healthcare has a financial advantage over HCA Healthcare in both BVPS and PB Ratio. HCA Healthcare ratios show a clear negative BVPS year over year, which is undesirable and thus creates a negative PB Ratio in return, which is not a valuable tool for analysis. ABC Healthcare has been more successful in overcoming losses and creating general value for its shareholders in comparison to HCA Healthcare (Ross et al., 2021).
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The PB ratio pricetobook ratio is a valuation metric that compares the market price of a companys st... View the full answer
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Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston
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