Horizontal & Vertical Analysis of Ascension Health

Horizontal & Vertical Analysis of Ascension Health

Introduction

Ascension Health is a Catholic and non-profit heath care system that offers acute care, community health, long-term care, rehabilitation, psychiatric, residential care services to vulnerable and poor people across the United States. The organization was previously known as Daughters of Charity National Health System, Inc. and changed its name to Ascension Health in November 1999. The company also operates in community clinics, nursing homes, and other health care providers. The network of Ascension Health's medical facilities is span across 20 states and the District of Columbia (Yahoo Finance, 2013). Thus, Ascension Health is one of the well known and successful non-profit health care systems of the United States. This paper is focused on horizontal and vertical analysis of Ascension Health for the year 2010 and 2011, in order to analyze company's financial viability and position in the market for the given periods.

Discussion

Line Items - Percentage Increase & Decrease

The horizontal and vertical analysis of Ascension Health reveals that company's total assets have slightly increased in 2011 as compared to 2010; however, total liabilities have decreased in 2011 as compared to its previous year (see appendix). Total assets of the company have increased by approximately 10% and total liabilities have decreased by approximately 5%. The increase in total assets is mainly due to the increase in short term investments, account receivables, and other assets as these items have largest percentage increase during the given period. On the other hand, decrease in total liabilities is associated with the decrease in current portion of long term debt, long term debt, and pension and other post retirement liabilities, since these items represent largest percentage decrease. Thus, the increase and decrease in these line items have particularly impacted company's financial performance.

Impact on Company's Financial Viability

The analysis reveals that company has not increased its liabilities as much as its assets have increased during the period, which indicates that company's financial viability is quite effective, i.e. company is in sound position to generate adequate earnings for meeting its operation expenses and financial liabilities. In addition, the company also provides a potential for future growth. Therefore, Ascension Health represents a potential for growth and its largest percentage change items reveal a good impact on the financial position and performance of the firm, since the company is now financial viable. Hence, Ascension Health's financial position and ...