Analysis of Ramsay Health Care Limited's Financial Performance Report

This report presents a comprehensive financial performance analysis of Ramsay Health Care Limited, focusing on the year 2018. It begins with an executive summary and introduction, followed by a discussion of the company's core business, industry context, and key competitors. The analysis delves into internal and external funding sources, crucial financial performance elements such as revenue, gross profit, net profit, earnings per share, and financial ratios like gross profit margin, current ratio, and asset turnover. The report also covers after-report events, changes in accounting policies, asset valuations, intangible assets, impairment losses, and initiatives related to social responsibility. The conclusion indicates a decrease in financial performance in 2018 compared to 2017, supported by the financial data and ratio analysis presented. The report is based on the company's annual report and is designed to assess the financial health and performance of the company.

Running head: CORPORATE FINANCIAL PERFORMANCE ANALYSIS OF RAMSAY
HEALTH CARE LIMITED
CORPORATE FINANCIAL PERFORMANCE ANALYSIS OF RAMSAY HEALTH
CARE LIMITED
Name of the Student:
Name of the University:
Author Note

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Executive Summery
The report is prepared to analyse the different aspect of annual report of the Ramsay Health
Care Ltd. This report explains the brief about the company, its industry and the competitor.
Further, this analyse the various aspect of the annual report of the firm for the year 2018 to
ascertain the financial performance of the company. The report also consider the
sustainability report of the firm. Lastly, the paper concludes that the financial performance of
the company is decreased in the year 2018 compared to the performance of 2017.

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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Core business of Ramsay Health Care Limited.....................................................................3
Industry and competitor.........................................................................................................4
Internal and external sources of funding................................................................................5
Key elements of financial performance.................................................................................5
After report event...................................................................................................................7
Amount of assets....................................................................................................................7
Accounting policy for PPE.....................................................................................................8
Intangible Asset......................................................................................................................8
Accounting policy for intangible asset...................................................................................8
Impairment losses...................................................................................................................8
Initiative regarding social responsibility................................................................................8
Media story on the social responsibility initiative.................................................................8
Importance of social responsibilities......................................................................................9
Conclusion..................................................................................................................................9
References................................................................................................................................10

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Introduction
This report is prepared to analyse the corporate financial performance of the Ramsay
Health Care Limited. The report gives the brief background of the company including the
core business of the firm as well as the industry and the competitor of the company. Further
this paper analyse the funding source of the company and financial structure of the company.
This also describe the post- reported event and the element of the financial performance. This
paper also highlight the changes in the financial policies of the firm. Further, this report
analyse the assets and the related terms with the asset. Lastly, this report explain the
corporate responsibility and sustainability report of the company and the other factors related
with it.
About the Ramsay Health Care Limited
The chosen company for this report is Ramsay Health Care Limited. The Ramsay
Health Care Limited is a global health care company mainly known for their high quality
services and offering excellent care to the patients. The Paul Ramsay AO established the
company in 1964 at Sydney, Australia. The company is currently offering the range of
services in more than 11 countries though the 480 facilities (Ramsayhealth, 2019). This
makes the Ramsay Health Care Limited the one of the largest private healthcare company in
the world. The main focus of the company is to maintain the high safety in their services and
accordingly operates its business.
Discussion
Core business of Ramsay Health Care Limited
The core business of the company is to provide the health care services to the patients.
Ramsay Health Care Limited is the market of the Australian heath care sector. The company
facilities the services for the high range of the health care needs starting form primary health

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care to highly complex surgery. The company treats more than 8.5 million patients in its
hospitals and primary care clinics located in Australia, United Kingdom, France, Norway,
Germany, Sweden, Denmark, Hong Kong, Malaysia, Italy and Indonesia. In addition to its
comprehensive range of private hospital, the company also operates four public facilities in
their home country. The most important in this is the Joondalup Health Campus, which is a
teaching hospital with the license of more than 700 beds. The company also involves in the
community of the pharmacy brand that are in functions in more than 35 in house. The
company also have the retail franchise operation that supports more than 55 community
franchise pharmacies. The company also involved in the training and researching in both the
undergraduate and postgraduate of the future medical and the nursing work force.
Industry and competitor
The industry of Ramsay Health Care Limited is the health care industry. Not only the
Australian heath care industry, the health industry of the entire world in growing rapidly. The
industry of the Ramsay Health Care Limited showed the rapid growth in the last few years as
the pollution and the other factor influencing the health of the people is rapidly increasing.
This is one of the highest growing industry of the world (Duckett & Willcox, 2015). As the
disease are increasing and the food habit as well as the uses of the chemical products are
increasing day by the day. The expectation of this industry is also shows the high growth in
the near future.
The top competitor of the Ramsay Health Care Limited is the Ansell Limited. The
Ansell Limited is the Australia based manufacture company. The company manufacture the
various medical safety product and tools as well as the protection product of the other various
industry (Ansell, 2019). Initially the Eric Norman Ansell founded the Ansell Ltd as the
Dunlop Pneumatic Tyre Company of Australia Ltd in 1899. The company especially popular

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for their rubber gloves. The company manufactures the rubber gloves for the medical safety
as well as the other industrial safety, surgical tool, condoms and other medical tools.
Internal and external sources of funding
As per the annual report for the year, 2018 the main source of the internal funding are
Restructuring of RGdS, Impairment of Ramsay UK and other. The company gather the
internal funding from the above mention three sources. The highest of $ 121,976 is collected
through the Impairment of Ramsay UK and $ 29,941 is from the Restructuring of RGdS in
the other 2018. Further, the company arises the internal fund from the other sources of $
39,073 for the year 2018. The company also arose internal fund $ 13,146 from the profit of
the joint venture.
The main external source of funding for the Ramsay Health Care Limited are the
short- term loan, long- term loan. The Ramsay Health Care Limited is mainly used the above
stated two sources of the external funding for the company. The short loan of the company is
$ 100,078 in the year 2018. While, the long- term borrowings of the company stands as the $
3,852,032 in the year 2018. This shows the main external source of funding for the Ramsay
Health Care Limited is the loan and borrowing form the outsiders. Apart from this, the
company also rise the external funding by issuing shares like preference share, equity shares.
The company also rise some fund from its creditors as per the balance sheet of the year 2018.
Key elements of financial performance
The financial performance of any company can be analyse by the observing the
following key elements of the company:-
Revenue: - The revenue earned by the firm is the important aspect to analyse the financial
performance of the company. Revenue earned by the company shows the market share of the
company including the demand in the market as well as the selling ability of the firm. Here

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the company earned the revenue of $ 9,181,371,000 in the year 2018 that is higher than the
2017 which shows growth in the revenue earning of the firm (Ramsayhealth, 2019).
Gross profit: - After revenue, the second important aspect of the financial analysis is the
gross profit. This reveals the efficiency of the firm. The higher possible part of the revenue
generated as the gross profit is consider as good (Edwards, 2016). Here, the gross profit
earned by the company for the year 2018 is $ 72,406,000 that is lower than the last year.
Net profit: - The next is the net profit. This reveals the how much company expend to
generate the sale. Again, same like the gross profit, the higher possible margin is consider as
good. Here, the company earned the net profit of $ 411,214,000 again lower than the last
year.
Earnings per share: - Earning per share is an important element to analyse the financial
performance of the company in the investor’s point of view. This influence the investment
decision of the third party. The high rate of the earning per share in consider as good. Here,
the company is showing 186.7 cent per share that is also lower than the previous year.
Financial ratios: - Apart from the above aspects, the various financial ratios are also needed
to properly analyse the financial performance of any firm. Here, this report consider the some
important financial ratio to analyse the performance of the firm (Crowther, 2018). The ratios
are as follows:
Ratio 2018 2017 Formula
Groos Profit Margin 8% 10% Gross Profit/Revenue*100
Current Ratio 1.2 1.0 Current Asset/Current Liability
Total Asset Turnover 1.0 1.0 Revenue/ Average Total Asset
Net profit Margin 4% 6% Net Profit/ Revenue*100
Financial ratio of Ramsay Helthcare Ltd.

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The above chart shows the some important calculated financial ratio of the Ramsay
Healthcare Ltd for the year 2017 and 2018. The gross profit margin and the net profit margin
of the firm is decreased in the financial 2018 compared to the 2017 that means there is
decease in the profitability of the firm. The current ratio indicates the liquidity of the firm and
the ability of the firm to meet its current liability by selling their current asset. The ideal
current ratio is 1. To high current ratio is also not consider as good as it means that the
company is not properly using their asset current asset. Here, in both year company has the
more than 1 in their current asset that is good liquidity sign of the entity. Lastly, the asset
turnover ratio reveals how efficiently the firm using their asset to generate the revenue for the
company. The high ratio is consider as good but should not be less than 1. Here, in both year
the company maintains their average asset turnover as 1 that can be considerable.
After report event
No, Ramsay Healthcare Ltd does not reveals any event or transaction after preparing
the report in the Annual report of 2018.
Changes in the accounting policy
Ramsay Healthcare Ltd changes the accounting existing accounting policy and
adopted the new accounting policy in respect of the leases, revenue from the contract with the
customers, financial instruments, share based payment transaction and the uncertainty over
tax treatment. The policy regarding the leases is changed as per thee AASB 16. The revenue
from the contract with customer is changed in the basis of AASB 15. The changes in the
financial instrument is done in the basis of AASB 9. AASB 2016-5 is the basis of the change
in respect to the share based payment. Lastly, AASB 112 revised the uncertainty over income
tax treatments.

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Amount of assets
The valuation of the property, plant and the equipment is $ 4,113,162,000 at the
reporting date as per the annual report of 2018.
Accounting policy for PPE
The property, plant and equipment are valued at the cost less accumulated
depreciation and any accumulated impairment losses. The depreciation is calculated in the
straight- line basis over the estimated life. The company used the historical method to
estimate the useful life of the assets.
Intangible Asset
The company reported the Goodwill, Service Concession Asset and the development
Costs as the intangible asset in the annual report of 2018. The discloser of the intangible asset
is very important to ascertain the true value of the firm.
Accounting policy for intangible asset
The company consider the different appropriate policy of AASB to value the different
types of intangible assets. As the goodwill is valued at the cost less any accumulated losses.
Impairment losses
The building, plant and the goodwill of the company is impaired during the financial
year of 2018. The report also shows the accumulated impairment loss of $ 27,304,000 is the
financial year 2018.
Initiative regarding social responsibility
The company taken the initiative regarding the environmental factor and set up and
environment management committee to ensure the environment sustainability (Ramsay,
2019).

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Media story on the social responsibility initiative
In 7th of September 2018, the company launches the farmer relief plan. In this
company waives the excess hospital fee and the co-payments for the struggling farmers
(Ramsay, 2019).
Importance of social responsibilities
In today’s modern world, the corporate social responsibilities are became very
important as this increase the value of the firm and create a good image of the firm among the
stakeholders of the firm (Lozano & Haartman, 2018).
Conclusion
The paper concludes that the Ramsay Health Care Ltd is the biggest health care
service provider of Australia. The company is engage in the health care services. Further, in
the basis of the various financial analysis this paper concludes that the Ramsay Health Care
Ltd performing well in terms of the financial performance. The financial performance of the
company in year 2018 is decreased from the performance of the last year. Lastly, the paper
concludes that the Ramsay Health Care Ltd is taking initiative regarding the corporate social
responsibility as it become very important in current time.

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References
Ansell (2019). Ansell - Medical and safety supply company. Retrieved from
https://www.ansell.com/us/en/about-us
Crowther, D. (2018). A Social Critique of Corporate Reporting: A Semiotic Analysis of
Corporate Financial and Environmental Reporting: A Semiotic Analysis of Corporate
Financial and Environmental Reporting. Routledge.
Duckett, S., & Willcox, S. (2015). The Australian health care system (No. Ed. 5). Oxford
University Press.
Edwards, J. B. (2016). Modern Gross Profit Analysis. Journal of Corporate Accounting &
Finance, 27(4), 45-55.
Lozano, R., & von Haartman, R. (2018). Reinforcing the holistic perspective of
sustainability: analysis of the importance of sustainability drivers in
organizations. Corporate Social Responsibility and Environmental
Management, 25(4), 508-522.
Ramsay (2019). Retrieved from
https://www.ramsayhealth.com/-/media/Documents/RHC/Performance-Report/
Environmental/Summary-of-Environmental-Sustainability-Policy-2015.pdf?la=en
Ramsay (2019). Retrieved from
https://www.ramsayhealth.com/News/General-News/Ramsay-waives-fees-and-raises-
funds-for-struggling-farmers
Ramsayhealth (2019). About Ramsay Health Care. Retrieved from
https://www.ramsayhealth.com/About-Us/Overview
Ramsayhealth (2019). Retrieved from
http://www.ramsayhealth.com/common/emag/rhc/annualreport2018/RHC-AR2018.pdf