I have chosen to research Aetna Inc. “Aetna Inc. is a diversified health care benefits company that provides healthcare and related benefits, serving health care members, dental members, and group insurance customers” (Bloomberg L.P., 2015). “The Company offers medical, pharmacy, dental, behavioral health, group life and disability plans, and medical management capabilities and health care management services for Medicaid plans” (Bloomberg L.P., 2015).
a) Return on Assets: Return on assets (ROA) is calculated by dividing a company’s net income by total assets and is expressed as a percentage. “ROA gives an idea as to how efficient management is at using its assets to generate earnings” and is “an indicator of how profitable a company is …show more content…
A current ratio greater than 1 means that company’s current assets are more than its current liabilities and it should not have a problem if it liquefies. A Current Ratio less than one means that a company has more liabilities than assets and could have problems if it liquefies. However a higher current ratios is not always a good thing. An abnormally high current ratio is an indicator that a company may be underutilizing its resources. Aetna’s current Ratio is “.81” (Morningstar, Inc., nd.). Ideally one would like the current ratio to be 1, however .81 is not a bad current ratio. Aetna may be expecting some future earnings or a substantial return on a …show more content…
“The D/E ratio indicates how much debt a company is using to finance its assets relative to the amount of value represented in shareholders’ equity” (Investopedia, LLC., nd.). A higher debt to equity ratio is an indicator that a company is financing its growth with debt, whereas a lower debt to equity ratio means a company is financing its growth with its own capital which could result in lower dividends or earnings. Aetna’s Debt to equity ratio is “.49” (Morningstar, Inc., nd.). This indicates that Aetna has not taken out a lot of debt to finance increased operation. It essentially means that they are not a high risk.
i) Total Revenue: Total Revenue is calculated by multiplying the price at which goods or services are sold by the number of units or amount sold. Total revenue, is essentially the sum of all sales, and is “the amount of money that is brought into a company by its business activities” (Investopedia, LLC., nd.). Aetna’s total revenue is “60,059 USD Mil” (Morningstar, Inc., nd.). This number has continued to rise over the past 10 years. As long as it continues to rise it shows the company is keeping up with changes and not losing its market
a) Return on Assets: Return on assets (ROA) is calculated by dividing a company’s net income by total assets and is expressed as a percentage. “ROA gives an idea as to how efficient management is at using its assets to generate earnings” and is “an indicator of how profitable a company is …show more content…
A current ratio greater than 1 means that company’s current assets are more than its current liabilities and it should not have a problem if it liquefies. A Current Ratio less than one means that a company has more liabilities than assets and could have problems if it liquefies. However a higher current ratios is not always a good thing. An abnormally high current ratio is an indicator that a company may be underutilizing its resources. Aetna’s current Ratio is “.81” (Morningstar, Inc., nd.). Ideally one would like the current ratio to be 1, however .81 is not a bad current ratio. Aetna may be expecting some future earnings or a substantial return on a …show more content…
“The D/E ratio indicates how much debt a company is using to finance its assets relative to the amount of value represented in shareholders’ equity” (Investopedia, LLC., nd.). A higher debt to equity ratio is an indicator that a company is financing its growth with debt, whereas a lower debt to equity ratio means a company is financing its growth with its own capital which could result in lower dividends or earnings. Aetna’s Debt to equity ratio is “.49” (Morningstar, Inc., nd.). This indicates that Aetna has not taken out a lot of debt to finance increased operation. It essentially means that they are not a high risk.
i) Total Revenue: Total Revenue is calculated by multiplying the price at which goods or services are sold by the number of units or amount sold. Total revenue, is essentially the sum of all sales, and is “the amount of money that is brought into a company by its business activities” (Investopedia, LLC., nd.). Aetna’s total revenue is “60,059 USD Mil” (Morningstar, Inc., nd.). This number has continued to rise over the past 10 years. As long as it continues to rise it shows the company is keeping up with changes and not losing its market