American Healthways, Inc. provides care enhancement and disease management services to health plans and hospital through American Healtheways Services, Inc. (AHSI), a wholly owned subsidiary.
The company supports hospitals and health plans with common human resources, clinical, marketing and information technology (IT) resources.The company’s integrated care enhancement programs serve entire health plan populations through member and physician care support interventions, advanced neural network predictive modeling and confidential, secure Internet-based application that provides patients and physicians with individualized health information and data. AMHC provides comprehensive care services with emphasis on diabetes, cardiac disease, and respiratory disease. Care enhancement combines highly skilled , empathetic people with cutting edge technology to support and supplement the patient-physician relationship.For physician, AMHC is the extension of their office staff and for health plan, AMHC they are a sound decision and highly effective customer retention program. For the nine months ended 5/31/03, revenues rose 41 % to $119.
5 million. Net income rose from $6. 5 million. To $13. 4 million.
Revenues reflect significantly higher average health plan equivalent lives under management. Net income also reflects improved gross margins and an increased absorption of overhead. To give you an idea of how is the AMHC financial leverage the following ratios will show you the firms performances.Leverage ratio shows how heavily the company is in debt. The five-year trend shows that American Healthways are in good condition. It has a very low ratio in long-term and its total debt ratio is pretty much stable, which demonstrates that the company is not in a struggle to pay what they owe. Liquidity Ratio Liquidity ratio measures how easily the company can lay their hands on cash to pay immediate liabilities. The five-year trend demonstrates that American Healthways liquidity ratios are stable.
Averaging in about two percent to two point three percent on their current ration and cash ratio and it also has more opportunities to pay their bills with interval measure ratio. Efficiency Ratio Efficiency ratio measures how productively the company is using its assets. The five-year trend also demonstrates that American Healthways efficiency ratios are stable. Averaging one point two on their asset turn over, six percent on their fixed asset turn over, and forty-four point nine percent average collection period which tells you that they have an efficient and stable collection department.Profitable Ratio Profitable ratios are used to measure the companies’ return on its investment. The five-year trend again shows that American Healthways profitable ratios are going in the right direction. Although it went down on the 2000, it was able to do come back the following year and continue to increase its ratios by forty percent.
With all the ratios shown in the table, it illustrate that the company has the reason to be in the top 5 fastest growing business in the list of 100. The Price/Earning Ratio is an indicator of the relative expensiveness of a firm’s common stock.For AMHC, P/E ratio for year 2000 and 2001 were high because during that year the investors anticipate relative favorable future development and price of the stock went up from 8. 17 to 37.
32. For many companies, especially the newer technology and higher growth companies, you may see very high P/Es. In such cases, the shares maybe selling at very high prices even tough they are making very little money.
That happens when investors focus on the promise of significant future earning growth. If a company doesn’t have five years the table will give a Not meaningful (NM) value for the high and low P/E value.The price performance tables shows how AMHC stock’s percentage movement over each of five measurement period: 4 weeks, 13 weeks, 26 weeks, 52 weeks and year to date (YTD). AMHC’s price compared to S&P 500 is on a favorable range, which is at 88. 9 percent on YTD. The Rank in the Industry column shows how the stock performed relative to the industry, which the company operates. This means that the stock performed better than those of 83 percent of the company in its industry.
The fifth column, which contains an Industry Rank, It shows a percentile of 49. This tells us that the industry performed better than did 49% of the industries universe.The EPS history report shows you quarterly earnings per share for AMHC for the last four years. Earning per share is calculated by dividing the amount of the company’s profit available to common stock holders by the number of outstanding shares of common stock. By looking down at the columns, you can track any seasonality in the business. For AMHC, year 2000, their EPS was zero percent because of the introduction of the some new program which tied up their money on general administrative ; R;D cost due to introduction of new programs and acquiring new contract which made them hire more staff.
These expenses gave them low revenue for that year but it was gained the following year when it gets reflected at the income statement. By looking across the rows, you get a sense of how the company has grown from year to year. AMHC has achieved a steady growth and earnings per share over the period covered. The valuation ratios report helps investors decide whether a stock is inexpensive or costly relative to alternative investment opportunities Ratios to its Industry, Sector, and the S;P 500.
The P/E ratio shows that AMHC has 36. 95 % expected earning than all 3 categories combine.Beta shows that it has . 57 volatility to the overall stock market which means it indicate stability of the stock. The Price to sales is 4. 03, which indicates that compared to overall market it show that it suggest optimistic future earnings expectation on the part of the investors. Price to book is a theoretical comparison of the value of the company’s stock to the value of assets it owns free and clear of debt. Price to tangible book is similar to price to book, except that we have to subtract the value such as goodwill from book value.
Price to cash flow ratio is the current price divided by cash flow per share for the trailing twelve month. When measuring a company’s operating performance, cash flow is an alternative to net income, which is calculated by subtracting all expenses to revenue. Price to free cash flow looks at the cash the company’s operation actually generated in a given year, and subtracts important non-operations cash outlays; capital spending and dividend payments. Accordingly, free cash flow is the purest measure of a company’s capacity to generate cash.