Community Health Systems Financial Analysis

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The Community Health Systems (CHS) is one of the largest healthcare group in the United States with over 135 hospitals in 29 states and in England [1], with approximately 20,000 beds [2]. CHS serves more than 55% of the market with most affiliated hospitals being the only healthcare provider. While closing the accounts on 31st December 2012, the company had under its belt 162 hospitals out of which there were 156 general, acute care hospitals, 5 psychiatric hospitals and one rehabilitation center with 41,198 beds. CHS also operates 112 surgical centers Most of the centers provides high end services with well trained medical staff [3]. Community Health Systems started in 1985 and in the short period of 35 years has grown to become one of the largest healthcare group in the States. The company went public in June 2000 at $13 a share. The companies biggest growth phase occurred in 2007 …show more content…

CHS needs to identify the reasons for its high expenses and try decreasing costs, to catch up with its other industry rivals considerably improving in 2012. This is the most concerning of all ratios as the revenues earned by HCA is only twice the amount of CHS, but the profit margins of HCA amounts to seven times the value due to the lesser profit margins. However, profit margins have increased from 2011, after the federal inquiry which caused it to drop after 2010. The return on equity ratio of CHS is 9.50% which is higher than the industry average of 8.74%. This is a good value but the industry average is less due to the negative ROE of HCA holdings. If this is not considered the industry average would be 11.28%, which results in a lesser return on equity ratio. The earnings per share value of the company is 0.78 in 2012 and has increased from .63 in 2011. Long Term Solvency

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