Healthways: A Financial Analysis and Recommendations

Adcock, Katherine (2016) Healthways: A Financial Analysis and Recommendations. Undergraduate thesis, under the direction of Victoria Dickinson from Accountancy, University of Mississippi.

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The Accy 420 course at the University of Mississippi serves to provide students who are in both the Patterson School of Accountancy and the Sally McDonnell Barksdale Honors College an alternative route in which to write their theses. The course uses research methods and financial statement analysis to allow students to produce an in-depth analysis on a company of their choosing. Both a written thesis and a presentation are aspects of the course. Through ten weekly chapter submissions, students compose their final thesis made up of general company information, industry and geographical analysis, strategy analysis, financial statement analysis, accounting quality, equity valuation, audit and tax recommendations, and advisory recommendations. Throughout the analysis of Healthways, Inc., a few main issues for the company have become evident. In Healthways’ 2013 Annual Report, the company lists goals in which it anticipates a more than 50 percent increase in revenue for the health systems, hospitals, and physicians market in 2014. They also expect mid-single digits to low double digits growth for its three customer markets and a 20 percent growth rate for businesses with large employers. However, Healthways has shown decreasing revenues, increasing costs of services, and increasing liabilities for the past few years. Another issue that Healthways is facing is the large amount of goodwill shown on its financial statements. Healthways recorded $338,800,000 in net goodwill for December 31, 2013. Goodwill for 2013 made up 45 percent of total assets on the balance sheet. Goodwill has increased due to recent acquisitions, but the company has had a large amount of goodwill for some time. The balance of net goodwill as of December 31, 2008 was $484,596,000. For this project, only years 2009-2013 were looked into for financial analysis. Throughout this course, I have learned many new skills that will be helpful to me as I transition into my future career. Research skills are the main skills that I have learned from this class, and I believe that they are the most applicable. When the course began, I had never actually looked at a company’s 10-K reports before. Now, through analysis, I can easily locate items on 10-Ks and find information in the footnotes quickly. In doing this project, I had to research on different website, for instance Yahoo Finance, in order to find analysts’ estimates, stock prices, and industry information. Financial analysis is another skill that the course has taught me. I have learned how to do everything from ratios to valuation models. I have also learned new skills in Microsoft Excel, which employers emphasize as necessary skills.

Item Type: Thesis (Undergraduate)
Creators: Adcock, Katherine
Student's Degree Program(s): B.Accy in Accountancy
Thesis Advisor: Victoria Dickinson
Thesis Advisor's Department: Accountancy
Institution: University of Mississippi
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
Depositing User: Katherine Adcock
Date Deposited: 24 May 2016 16:46
Last Modified: 24 May 2016 16:46

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