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Financial Analysis of United Health Group Inc.

Essay Instructions:

This Module’s SLP is intended to allow you to apply what you have learned in the background readings regarding performing an analysis of a healthcare organization’s basic financial statement of operations. After completing each part of the background readings, search online for a healthcare organization’s statement of operations (at least two years of data; the organization can be inpatient or outpatient, either real or fictitious). Examine each of the columns and the totals in the statement of operations, using each of the topics introduced in Chapter 3 of the required background reading by Dr. Nowicki (2018), then answer the following:
How is your chosen organization doing in terms of its overall financial health?
What is your assessment of the organization’s revenues, expenses, operating income, nonoperating income, etc.? How have each of these lines changed from one year to the next?
What might the changes signify, and what might be the logical cause of the changes? What would your recommendations be for the following year’s revenue cycle?
How do changes in the economic market often affect the healthcare financial environment? Do you believe the healthcare revenue cycle models the rises and falls of the larger economy?
SLP Assignment Expectations
Conduct additional research to gather sufficient information to support your analysis.
Provide a response of 3-5 pages, not including title page and references. Include a copy of the organization’s statement of operations as an Appendix at the end of your assignment.
As we have multiple required items to be addressed herein, please use subheadings to show where you are responding to each required item and to ensure that none are omitted.
Support your paper with peer-reviewed articles and reliable sources. Use at least two references from peer-reviewed sources. For additional information on how to recognize peer-reviewed journals, see http://www(dot)angelo(dot)edu/services/library/handouts/peerrev.php and for evaluating internet sources:
https://www(dot)library(dot)georgetown(dot)edu/tutorials/research-guides/evaluating-internet-content
You may use the following source to assist in formatting your assignment: https://owl(dot)english(dot)purdue(dot)edu/owl/resource/560/01/. Paraphrase all source information into your own words carefully, and use in-text citations.

Essay Sample Content Preview:

Finncial Anaysis United Health Group
Author's Name
The Institutional Affiliation
Course Number and Name
Instructor Name
Assignment Due Date
Financial Analysis of United Health Group Inc.
Introduction
United Health Group is a major for-profit company that provides various health products and insurances. The company ranks on the 7th position among the Fortune 500. Moreover, the company is the largest healthcare earning organization in the world. The company's estimated revenue for the year 2019 was $242.2 Billion. The company has its headquarters in Minnetonka, Minnesota (United Health Group Annual Report, 2019).
Background
Richard Taylor Burke founded Charter Med in 1973; however, in 1977, the name was changed to United Health Group. UNH started its pharmaceutical operations back in 1998 through its subsidiary known as Diversified Pharmaceutical Services. This subsidiary was later sold to SmithKline Beecham for $ 2.3 Billion in 1944 (United Health Group Annual Report, 2019).
Evaluation of Financial Health
To determine the financial health of a company, it is essential to calculate the respective ratios. These ratios help understand the financial standing of a company (Rist et al., 2014). This report will discuss three different ratios of United Health Group that are paramount in understanding the company's standing in finances.
Ratio Analysis
The quick ratio is used to determine the company's ability to pay off its short term liabilities through its most liquid assets. A company has short-term obligations that must be paid off in order to decrease the liabilities. The quick ratio of UNH is estimated at 0.69 ("UnitedHealth group current ratio 2006-2020 | UNH," 2020). A higher quick ratio means that the company can easily pay off its short-term obligations. On the other hand, a lower value in the ratio may suggest that the company is struggling financially, and it has to work harder to pay off the short term debts. A value of 0.69 indicates that the company has a decent quick ratio and its ability to meet the short term loans is substantial. The delayed payments by the customer is also a reason why some companies have a lower value for the quick ratio.
Another ratio that holds immense importance in determining a company's financial standing is the current ratio analysis. The current ratio is a liquidity ratio that helps assess the company's financial standing by analyzing its capability to pay off the short term obligations (Hanif & Mukherjee, 2018). The current ratio of the Únited Health Group is valued at 0.82 69 ("UnitedHealth group current ratio 2006-2020 | UNH," 2020). Investors are generally concerned with the current ratio of a company because it tells about the company's ability to generate profits from the current assets. Revenue generation is the most important part of a business, the main indicator for the wellness of a company is its current ratio. The value of the current ratio must be above one. A value lesser than one means that the company has less cash in hand or liquid assets to fulfil its short term obligations. Since UNH has a current ratio of 0.82, this shows that the company is unable to cater to its short term loans and other liabilities that are withi...
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