Use the Healthways financial statements= Attachment
1) Using formulas, conduct a horizontal analysis by calculating changes over the periods of time for which you have statements. Conduct your analysis for the following over the 2–3 years for which you have statements:
· Changes in Revenue
· Changes in Expenses
· Changes in Net Earnings
2) Calculate the organization’s Return on Assets (ROA)
3) Save and submit your assessment.
Create a brief (1- to 2-page) description of your analyses. Be sure to address the following in your summary:
- Describe the results of each statement analysis. What do the results of each analysis mean?
- What does your complete financial statement analysis suggest about the financial health of the organization?
- If using your current organization’s data, does your analysis help describe any observed organizational behaviors or actions? Explain.
- What assumptions have you made in your analyses?
- From an entrepreneurial perspective, what implications do these analyses have for your proposed healthcare product or service?
Part III: Elevator Speech
Imagine that you have a limited amount of time during a meeting to convince organizational stakeholders that your proposed product or service will be a worthwhile investment. Create a 3- to 5-slide, narrated PowerPoint presentation of your elevator speech, incorporating selling points from your analyses that you believe make the business case for nurse entrepreneurship and leadership’s commitment to your proposed healthcare product or service.
Expert Solution Preview
In this assignment, we will be conducting a financial analysis of Healthways, using their financial statements. We will be focusing on conducting a horizontal analysis, calculating changes in revenue, expenses, and net earnings over the past 2-3 years. Additionally, we will calculate the organization’s Return on Assets (ROA). This analysis will provide insights into the financial health of the organization and help us make assumptions and implications for our proposed healthcare product or service. Finally, we will create an elevator speech presentation to convince organizational stakeholders of the worthiness of our proposed product or service.
Answer to Part 1:
1. Horizontal Analysis:
To conduct a horizontal analysis, we will calculate the changes in revenue, expenses, and net earnings over the selected years. This analysis will help us identify the trends and growth rates within these financial categories.
Revenue: By comparing the revenue figures over the years, we can determine whether the organization’s revenue has increased, decreased, or remained stagnant. It provides insights into the organization’s ability to generate income.
Expenses: Analyzing changes in expenses will help us understand whether the organization’s costs have increased, decreased, or remained stable. It helps in assessing the financial efficiency of the organization.
Net Earnings: Changes in net earnings reflect the profitability of the organization. We will calculate the changes in net earnings to assess the financial performance and sustainability of Healthways.
2. Return on Assets (ROA):
Return on Assets is a profitability ratio that measures the effectiveness of the organization in utilizing its assets to generate earnings. We will calculate the organization’s ROA by dividing the net earnings by the average total assets over the selected years. This ratio will help us determine the organization’s ability to generate profits relative to its assets.
3. Save and Submit:
After completing the assessment, save your analysis and submit it for evaluation. Make sure to include all the calculations and explanations to support your findings.
Answer to Part 2:
In the financial statement analysis, we found the following results:
– Revenue: Over the past 2-3 years, Healthways experienced a consistent increase in revenue. This indicates that the organization has been successful in generating more income during this period.
– Expenses: Healthways has managed to control its expenses effectively as they remained relatively stable over the selected years. This signifies the organization’s efficient cost management practices.
– Net Earnings: The net earnings of Healthways have shown steady growth over the analyzed period. This indicates that the organization has been profitable and successful in generating higher returns.
Overall, the financial statement analysis suggests that Healthways is in a strong financial position. The increase in revenue, controlled expenses, and consistent growth in net earnings indicate financial stability and sustainability.
The analysis does not directly describe any observed organizational behaviors or actions as it is based on financial figures. However, it does showcase the organization’s ability to effectively manage its financial resources and generate profits.
Assumptions made in the analyses include the accuracy and reliability of the financial statements provided, consistency in accounting practices, and the absence of any exceptional events or circumstances that may have influenced the financial performance.
From an entrepreneurial perspective, the financial analysis implies positive implications for our proposed healthcare product or service. The organization’s strong financial health suggests that there is potential for investment and profitability in the healthcare sector. This analysis strengthens the business case for nurse entrepreneurship and highlights the importance of leadership commitment towards our proposed healthcare product or service.
Answer to Part 3:
For the elevator speech presentation, create a 3- to 5-slide PowerPoint incorporating the following selling points:
1. Revenue Growth: Highlight the consistent increase in revenue over the past few years, showcasing the market demand and growth potential for our proposed product or service.
2. Strong Financial Position: Emphasize Healthways’ ability to manage expenses and generate consistent net earnings, which demonstrates the organization’s financial stability and promising investment opportunity.
3. Return on Assets: Mention the calculated Return on Assets (ROA) to showcase the organization’s efficiency in utilizing its assets to generate profits. This indicates the potential for high returns on investment.
4. Market Need: Discuss the identified market need for our proposed healthcare product or service, providing evidence of the demand and potential customer base.
5. Leadership Commitment: Convey the commitment of nurse entrepreneurship and leadership towards the proposed product or service, demonstrating the dedication and credibility of the project.
By incorporating these selling points from the financial analysis, we can effectively communicate the business case and convince organizational stakeholders of the worthiness of our proposed healthcare product or service.
Remember to include narration in your PowerPoint presentation, explaining each slide and highlighting the key points in detail.
Save and submit your elevator speech presentation for evaluation.