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Contemporary Corporate Reporting -Lanka Hospitals

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Contemporary Corporate Reporting -Lanka Hospitals

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PART A

SCENARIO

You are a financial analyst, advising clients on investment decisions. A client is interested in investing Rs. 100m in your chosen company. The client requires you to produce a detailed report on this company clearly showing your recommendation on whether or not the investment should be made.

WHAT YOU MUST DO

You are required to critically analyze and evaluate the financial performance of your company. You should concentrate on the performance over the past two years, but it is expected that you will use up to five years’ performance as background information and to highlight trends.

You need to provide the client with a business report which includes your analysis and evaluation of the critical areas of your company. The report must conclude with your recommendation to the client as to whether or not the investment should be made.

You MUST include a copy of your company’s income statement and balance sheet for the latest year you are analyzing as an appendix to the report.

PART B

Consider how your company communicates its strategies, performance and corporate policies.

Using corporate impression management theories, critically evaluate the company’s narrative reporting of its performance.

You may choose one part of the annual report, for example the Chairman’s statement, for your evaluation.

You should include relevant extracts from the annual report to support your analysis, and make appropriate references to academic literature.

Additional information

Table of Contents

Part A
1.0 Introduction
2.0 Background of Lanka Hospitals PLC
3.0 Analysis
3.1 Profitability
3.1.1 Gross Profit Margin
3.1.2 Net Profit Margin
3.1.3 Return on Capital Employed
3.2 Liquidity & Solvency
3.2.1 Current Ratio
3.2.2 Quick Ratio
3.2.3 Debt to Equity Ratio
3.3 Efficiency
3.3.1 Debtors Turnover
3.3.2 Creditors Turnover
3.4 Investor Ratios
3.4.1 Dividend Cover Ratio
3.4.2 PE ratio
3.4.3 Dividends Yield
4.0 Recommendation & Conclusion

Part B
Corporate impression management

References
Appendix
Preview

Part A

1.0 Introduction

This report will analyze the financial performance of Lanka Hospitals PLC for the last few years. The performance evaluation will be conducted using the past 5 years data of the company. For the purpose of comparing, the financial performance of Nawaloka Hospitals PLC, which is the main competitor of Lanka Hospitals will be selected. The report will consist the overall financial performance and will conclude after recommending on the possibility of investing in Lanka Hospitals.

2.0 Background of Lanka Hospitals PLC

Established in 1982, Lanka Hospitals PLC (LHP) is one of the leading private hospitals in Sri Lanka. The entity offers all kind of medical assistance to the Sri Lankans. Having a total patients base over 4 million, the company has one hospital situated in the heart of Colombo. They have 367 beds and is pioneered in providing laboratory services to the island wide customer base via their collection centers and regional labs.

3.0 Analysis

3.1 Profitability

3.1.1 Gross Profit Margin

The GP margin is initial indicator of the profitability for an organization. It could be seen that the GP margin of Lanka Hospitals has dropped slightly compared to previous year. In comparison the competitor’s ratios, it could be seen that LHP has grown their margins, despite the adverse sales recorded in the industry as an overall. The main reason for this decrease in the GP margin can be seen as the increase of the costs such as cost of professional services, medical supply cost. Those have impacted the hospital’s cost negatively even though the sales have increased.

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