Long-Term Sustainability of Merger and Acquisitions as a Growth Driver: A Case Study of Hospital Corporation of America
Long-Term Sustainability of Merger and Acquisitions as a Growth Driver: A Case Study of Hospital Corporation of America
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Date
2019-04-24
Authors
Goen, Abrial
Journal Title
Journal ISSN
Volume Title
Publisher
University Honors College, Middle Tennessee State University
Abstract
Hospital Corporation of America (HCA) is well-known in the healthcare industry
as being a giant in the hospital management sector. HCA’s current growth driver,
mergers and acquisitions (M&A), was examined in order to determine whether the
current growth strategy is sustainable. By measuring various financial metrics related to
growth, finding the correlation to metrics relating to M&A activity, and considering
qualitative evidence, analysis shows HCA's M&A activity has driven significant business
growth for the firm. After calculating a suite of financial ratios intended to measure the
financial health and sustainability of firms, it was determined that HCA's current growth
strategy cannot be continued indefinitely on a sustainable basis, nor does is maximize
shareholder value. Continued reliance on M&A activity for business growth is not
sustainable for HCA, as found through the establishment of HCA's current growth
strategy, and examination of the effects of this strategy financially.1
Description
1 All financial data concerning HCA from public 10-K SEC filings unless otherwise stated
Keywords
Hospital Corporation of America,
merger and acquisition,
sustainability,
growth drivers,
HCA,
M+A