Ohi financial analysis
Omega healthcare assets span all over the United States and the United Kingdom. SWOT Analysis Strengths One of Omega’s primary strengths is its strong distribution network that is associated with multiple outlets. Situation renders the organization highly completive compared to its rivals. The competitive edge of the company I also reinforced by the low-cost structure of the company. Moreover, Omega Healthcare Investors is in a strong financial position that enables that empower the company to compete with its key rivals. Most important, interest rates are low thus giving the company an opportunity to invest. Threats Omega Healthcare Investors faces the threat of new market entrants who threat to grab a section of the organization’s market share. Another menace that the firm is facing is the devaluing of the exchange rates, which threaten to low the company’s profits.
Fuel price is also risen thus threatening to increase the cost of production of the company. Omega Healthcare Investors is additionally threatened by the increase in substitutes in the market. These economies of scale have enabled the company to offer products at mitigated prices. The increase in customer has further contributed to the low prices in which the company has been offering its products. This has been due to the immense profits that have allowed the company to adopt the cost leadership strategy as a way to dominate in industry. Changes/Cause for Operations The company’s cost of operation has increased due to the expansion processes that the company has been undergoing. Coën, Lecomte, & Abdelmoula (2018) elaborate that Omega Healthcare Investors has boosted its property in 2015 by acquiring Aviv as a cost of $3.
The firm’s return of Capital is 3. 92 while the Return of Invested Capital stands at 5. The return on assets for the company is 3. 24 while the return on equity is 8. Current Ratio Analysis Current ratio states the ability of a company pay its short terms debts. The asset turnover ratio of the entire sector stands at 0. 07 while that of the S&P 500 is 0. This implies that OHI exhibit a high frequency of turning its assets into the cost/amount of goods sold. Liquidity Analysis The liquidity of OHI has been fluctuating in recent years as shown in the figure below. The company has been experiencing intermittent periods of high and low liquidity levels. The organization’s current quote stands at $36. This value is expected to rise to $51.
881 by 2024. This implies that the growth in revenue for the company is expected to grow by 41. 02% in the coming five years as shown in the graph below. ’s beta is 0. Cost of Equity = 2. 5 x 6% = 5. On the other hand, the Cost of Debt = 192. The latest Two-year Average Tax Rate is 2 percent. Future Investment Potential investors should invest in OHI as future estimates project a steady increase in the stock price and dividend value. As mentioned earlier, the stock price of the company is expected to rise from its current value of $36 to $51 in the next five years. This projects a tendency of the company’s profit to rise hence an attractive investment opportunity for potential investors in the future. Capital Budget for Investment OHI possess an estimate of $0.
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