Reference no: EM133723543

Case Study - Commonwealth Health Plans

Description
This is a financial accounting/Banking Task. Please write a 5 pages paper using the guidelines, case study and spreadsheet provided - 5 pages. Don't plagiarize as it would be checked. Just perform the task by following the guidelines.

1. Ensure you check the zip for detailed instructions.

2. Please read the case study carefully. A complete write-up will address all issues raised in the prompt. In particular, your write-up should include the following components: Financial Statement and Operating Indicator Analyses .

a. Statement of cash flows analysis.

b. Du Pont analysis, in which you compare 1) Commonwealth's ROE in 2016 vs. Commonwealth's ROE in 2017 and 2) Commonwealth's ROE in 2017 vs. the national HMO industry median in 2017. To calculate the 2017 industry median ROE, use the median total margin and median total asset turnover, and derive the equity multiplier from the median debt ratio (see Exhibit 23.4). Your calculated ROA and ROE will differ from the medians reported in Exhibit 23.4, which is okay.

c. Analyses of select financial ratios and operating indicators. These analyses should 1) consider trends over time and 2) compare Commonwealth's performance to that of its primary competitors in Virginia, state-level industry data, and national-level industry data (whenever the relevant data are available).

d. Analysis of Commonwealth's medical loss ratio (MLR). Please consider the ACA required MLR minimum threshold of 85% for large group plans. Conducting Analyses for Different Industries.

e. Discussion of key differences in analyzing financial and operating performance for a managed care organization (MCO) vs. for a hospital or other provider organization. Key Areas of Concern and Recommended Courses of Action.

f. Based on the results of your analyses, you should identify and discuss key areas of concern for Commonwealth's management.

g. Lastly, you should develop a set of clear, actionable recommendations for how Commonwealth could potentially improve its financial and operating performance.

3. There are many different financial ratios and operating indicators that you could potentially consider, but you do not need to discuss all of them. Focus on specific metrics and performance areas that you think are most important and relevant to insurer operations. When analyzing financial ratios and operating indicators, do not just calculate numbers. Instead, you should consider trends over time, perform benchmarking, and discuss the significance and potential drivers of the metrics' values.