Sound financial analysis involves more than just calculating numbers. The American Association of Individual Investors suggests that investors consider the qualitative factors below when evaluating a company. Answer the questions for River Community Hospital. When there is insufficient information in the case to answer a question, briefly speculate about why the question might be relevant to the hospital.
a) Are the company’s revenues tied to one key customer?
b) To what extent are the company’s revenues tied to one key product?
c) To what extent does the company rely on a single supplier? (Hint: Physicians and nurses are key suppliers of labor to a hospital.)
d) What about the competition?
e) What are the company’s future prospects?
f) How does the legal and regulatory environment affect the company?