Ratio Analysis - DaVita HealthCare Partners

Ratio Analysis - DaVita HealthCare Partners

Introduction

This study is about the ratio analysis of the DaVita HealthCare Partners Inc, evaluation of the ratio and summary of the firm's financial position. The DaVita HealthCare organization was work hard in the area of the social, clinical and the operational departments in the kidney care in order to increase its profitability, market image and the market share. The organization worked day and night in order to make the quality and excellent product for increasing the number of customers and their satisfaction too. The organization delivered the outstanding services and easily increased its profitability ratio and liquidity ratio. However, the organization found hard to maintain its long term debt level. The DaVita HealthCare organization used its long term debt for increasing the operation, revenue of the services and the profitability of the company.

Ratio Analysis

Liquidity Ratio

Current Ratio

Current ratio: current assets / current liabilities

2012 = 2,878,794/2,018,174

= 1.42 times

2011 = 2,293,244/1,164,752

= 1.97 times

Quick Ratio

Quick ratio: current assets - inventory / current liabilities

2012 = 2800668/2,018,174

= 1.39 times

2011 = 2217513/1,164,752

= 1.9 times

Cash Ratio

Cash ratio: cash / current liabilities

2012 = 533,748/2,018,174

= 0.26 times

2011 = 393,752/1,164,752

= 0.33 times

Financial Leverage Ratio

Total Debt Ratio

Total debt ratio = (Total Assets - Total Equity) / Total Assets

2012 = 11,674,767/16,018,596 

= 0.72 times

2011 = 6,284,517/8,903,808 

= 0.71 times

Debt / Equity

Debt / Equity = Total Debt /Total Equity

2012 = 11,674,767/3,763,137

= 3.10 times

2011 = 6,284,517/2,141,075

= 2.94 times

Equity Multiplier

Equity multiplier = 1 + Total Debt / Total Equity

2012 = 1+ (11,674,767/3,763,137)

= 4.10 times

2011 = 1+ (6,284,517/2,141,075)

= 3.94 times

Times Interest Earned

Times Interest Earned = EBIT / Interest

2012 = 1001304/0

= 0 times

2011 = 916,605/0

= 0 times

Cash Coverage

Cash Coverage = (EBIT + Depreciation) / Interest

2013 = (1001304+343,908)/0

= 0 times

2012 = (916,605+267,315)/0

= 0 times

Turnover Ratio

Inventory Turnover

Inventory Turnover = COGS / Inventory

2013 = 5,578,853/78,126

= 71.41 times

2012 = 4,633,620/75,731

= 61.19 times

Days' Sales in Inventory

Days' Sales in Inventory = 365 / Inventory Turnover

2013 = 365/71.41 times

= 5.11 days

2012 = 365/61.19 times

= 5.97 days

Receivables Turnover

Receivables Turnover = Sales / Account Receivable

2013 = 8,186,280/2,058,210

= 3.98 times

2012 = 6,731,806/1,757,013 

= 3.83 times

Days' Sales in Receivables

Days' Sales in Receivables = 365 / Receivables Turnover

2013 = 365/3.98 times

= 91.71 days

2012 = 365/3.83 times

= 95.30 days

Total Asset Turnover

Total Asset Turnover = Sales / Total Assets

2013 = 8,186,280/16,018,596

= 0.51 times

2012 = 6,731,806/8,903,808

= 0.76 times

Capital Intensity Ratio

1 / Total Asset Turnover

2013 = 1/0.51 times

=1.96 times

2012 = 1/0.76 times

= 1.32 times

Profitability Ratio

Profit Margin

Profit Margin = Net Income / Sales

2013 = 536,017/8,186,280

= 6.55%

2012 = 478,001/6,731,806

= 7.1%

Return on Assets (ROA)

Return on Assets (ROA) = NI / TA

2013 = 536,017/16,018,596

= 3.35%

2012 = 478,001/8,903,808

= 5.37%

Return on Equity (ROE)

Return on Assets (ROA) = NI / TE

2013 = 536,017/3,763,137

= 14.24%

2012 = 478,001/2,141,075

= 22.33%

Evaluation of Ratio

Liquidity Ratio

Liquidity ratio is use for determining the organization's ability in order to pay off its short-term liabilities. The higher liquidity ratio shows that the organization had the high ability for paying its short-term debts while the lower liquidity ratio shows that the organization had the inefficiency in paying its short-term debt level. While, the most highest liquidity ratio shows that the inefficiency of the ...