Healthcare post merger analysis Essay Example | Topics and Well Written Essays - 1500 words

Healthcare post merger analysis - Essay Example Consolidation in this industry is essential for its sustainable growth in the long run and to meet the emerging challenges in the industry in terms of huge investment and infrastructural facilities needed to cope up with the increased demand in the society for healthcare services. Evaluation of financial performance Study by Healy, Palepu & Ruback (1990) found that â€Å"The results indicate that merged firms have significant improvements in asset productivity relative to their industries after the merger, leading to higher post-merger operating cash flow returns.† The criteria for evaluating financial performance of the organizations post-merger are multifarious depending upon the type of organization and its objectives. However, in a typical company running on profit basis, return on investment post merger is an important criterion for evaluation of financial performance from the shareholders’ point of view. There are mergers also taking place between for profit and n ot for profit organizations. Financial and operating ratios as performance measures are adopted by the organizations for industry comparison as well as comparison with the historical performance. Of which, the following are the important ratios used for measuring performance in term of profitability. Return on assets : Net Income / Total Assets Return on equity : Net Income / Shareholders’ equity Return on capital employed : Earnings Before Interest and Tax (EBIT)/(Equity + Debt) Similarly, Earnings per Share (EPS), liquidity ratios, Cash flow ratios can be calculated for analysis and comparison. Budgetary analysis as a tool for evaluation will be effective as it reveals variances. This will enable the management to compare actual with the budgeted performance for exploring the reasons for variances and take corrective actions wherever necessary. Kumar (2012) stated â€Å"Between 1985 and 2007, 51 large companies in the industry consolidated into only 10 organizations†¦ they are effective methods of cutting costs.† Reduction in number of employees post merger, legal expenses, management cost and marketing costs are some of the areas where cost cutting is possible in the merged entity. Determinants of financial results post-merger It is important to determine whether or not the merger generated favourable financial results for the organization post merger. Section of Antitrust Law (2003, p.7-8) states â€Å"The size of the geographic will determine the number of competitors in the market, their market shares, and the likelihood of anticompetitive effects. Geographic definition issues have determined the outcome of the majority of hospital merger decisions.† Apart from improvements in operational performance due to synergies created in merger and environmental factors, it is important to note that the method of accounting, for example, purchase or acquisition method adopted for merger or type of financing (equity or debt) the merger has significant impact on the results of the merged organization from investment angle. Therefore, instead of profitability ratios, adopting pretax cash flows and increase or decrease thereof,

The Universal Law Formulation Of The Categorical Imperative Essay

The Universal Law Formulation Of The Categorical Imperative - Essay Example â€Å"Act in such a way that you treat humanity, whether in your own person or in the person of any other, never merely as a means to an end, but always at the same time as an end†.This formulation deals with the free will of all persons, which arises from rational action. Thus, if a person’s free will is not rational, then there is no freedom, as freedom is not entirely autonomous. A person’s actions affect others who are around him, and if a person’s free will interferes with the freedom of another person, then that action is not morally acceptable. A master may have a right to his slave. He has the right to own the services of his slave, but if the slave owner feels that he also owns the slave and that the slave is his own property, then he has devalued the slave to a means to an end and not an end in itself. This is morally wrong as it devalues humanity of the other person, in this case, the slave. A person has primarily the perfect duty to preserve hu manity by using it in a manner that is a not a means to an end to themselves or to others. Then, with the imperfect duty, one should always strive to improve their humanity or other’s humanity for the good of all and as long as it does not inhibit the perfect duty.Third, Kant suggests that all rational beings must act as legislative members through their maxim, in the universal kingdom of ends. This formulation when broken down means that a person should treat himself and others both as a means and an end, but mostly as an end in itself.