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healthcare post merger analysis - Essay Example
Finance & Accounting
Pages 6 (1506 words)
Healthcare Industry: Post merger analysis Introduction Due to uncertain economic conditions and unfavourable regulatory environment in prevailing in the healthcare industry today, the organizations have few choices but to opt for merger and acquisition to survive in business…
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 “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 not for profit organizations. ...
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