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Oceania Healthcare (OCA) three years financial statements analysis

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Introduction
Three of the most well-known healthcare organisations in New Zealand that are
involved in the rest home operator industry are Oceania Healthcare (OCA), Summerset
Group Holdings Limited ([Link]), and Ryman Healthcare Limited (RHCGF). The New
Zealand Stock Exchange (NZX) lists them all (Dumay [Link]., 2022). This examination, which
includes a three-year financial statements analysis, has heavily relied on their market
valuations, annual reports, and other data (Oyewo [Link]., 2022). For a more precise
assessment, a three-year ratio study was conducted on Oceania Healthcare (OCA) and
compared to the two comparable firms (Wetmore [Link]., 2022).
Oceania Healthcare (OCA)
1.
Liquidity:
Current ratio
The management use the ratios to assess the liquidity of the business. It evaluates the
company's capacity to fulfil short-term commitments (those that are due in less than a year).
This ratio is compared to either the industry average or 1. Working capital is redundant if it is
too high, but it is acceptable (or safe) if it is somewhat higher than one. In addition to bond
and mortgage interest, these long-term financial commitments also include loan and mortgage
interest (Oyewo [Link]., 2022). The current ratio for Oceania Healthcare (OCA) dropped from
1.76 in 2022 to 1.61 in 2023 before hitting 1.58 in 2024. This low-rate range indicates that
the company's liquidity is relatively poor, since the optimum ratio is 3. This can be because
the business has few short-term responsibilities that do not need significant financial outlays
at that time (Wang [Link]., 2021). Another explanation would be having enough cash on hand
to fund operations without using a lot of borrowing or making long-term investments
(Gawęda [Link]., 2021). In 2024, Summerset Group Holdings Limited's current ratio is 1.58, up
from 1.60 in 2023. This suggests that the firm has kept its liquidity low to protect itself from
financial strain (Alvarez [Link]., 2022).
Quick ratio
The managers use the ratios to assess the firm's degree of capacity to satisfy short-
term commitments (those that are due in less than a year). This ratio is compared to either the
industry average or 1. Working capital is redundant if it is too high, but it is acceptable (or
safe) if it is somewhat higher than one (Gawęda [Link]., 2021). The Quick ratio is used to
evaluate Oceania Healthcare's (OCA) capacity to fulfil its short-term commitments as they
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develop (Wang [Link]., 2021). This ratio is important because it may be used to assess a
company's stability by examining its capacity to pay short-term debts with its assets without
suffering a significant decline in value. In 2022, the Quick ratio was 1.14; nonetheless, it
declined. In 2023 and 2024, this fell to 1.10 and 1.06, respectively. As a result, Oceania
Healthcare (OCA) has made enough long-term investments while keeping a healthy balance
between its present liabilities and assets (Alvarez [Link]., 2022).
Activity:
Total asset turnover
This ratio calculates how much equity there is in relation to all liabilities. It shows
how well the company uses its resources to produce income (Cathey [Link]., 2022). The higher,
the better. The company's gearing level is determined by comparing the ratio of liabilities in
the capital structure to shareholders' equity (Oyewo [Link]., 2022). Given that Oceania
Healthcare's (OCA) exposure to credit risk may be determined, this ratio computation is
significant (Alvarez [Link]., 2022). According to the financial statement analysis, the
company's gearing ratio poses a serious risk to its long-term viability. comparable to rivals or
the industry average (Dumay [Link]., 2022). The Efficiency Ratios have been steadily declining
during the last three years. From 0.105 in 2022 to 0.097 in 2023 and then to 0.095 in 2024,
the total asset turnover declined.
Debt:
Debt ratio
The management use the ratios to assess the amount of debt held by the organisation.
It shows how well the company uses its debt to make money. The higher, the better.
comparable to rivals or the industry average. This ratio contrasts Oceania Healthcare's (OCA)
total liabilities with its total assets (Gawęda [Link]., 2021). This ratio is computed to see if the
business can pay off its obligations by selling its assets (Cathey [Link]., 2022). This is crucial in
order to guarantee that the business maintains control over bankruptcy (Wang [Link]., 2021).
The company's debt ratio, which was 0.57 in 2022, rose to 0.62 in 2023, and then to 0.63 in
2024, shows how many times its assets may be used to pay interest on its obligations
(Alvarez [Link]., 2022).
Time interest earned ratio
The ratios are used by the management to assess the firm's capacity to fulfil its
interest payment obligations. The higher, the better. A TIE (= 1) is a concerning indicator as it
indicates that all of the company's operational and other activity profits are insufficient to pay
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interest (Cathey [Link]., 2022). According to this ratio, Oceania Healthcare's (OCA) revenue is
able to effectively meet the company's interest payments (Oyewo [Link]., 2022). This is
significant because the capacity to get further funding from financial institutions will be
evaluated. Furthermore, the Time Interest Earned Ratio increased from -0.96 in 2023 to -2.39
in 2024, from -6.05 last year. The examination of Oceania Healthcare's financial accounts
shows that sales income may cover interest payments and how often. Oceania Healthcare is
not functioning in a financially sound manner as a result (Gawęda [Link]., 2021).
Profitability:
Gross Profit Margin
The management use the ratios to assess the profitability of the business. It calculates
the portion of every dollar of sales that is left over after the company has paid for its
production and merchandise. A higher gross profit margin indicates lower manufacturing
costs for the company. Second, the company's operating revenue is very modest as compared
to its long-term financial commitments, which rely on operating revenue (Oyewo [Link].,
2022). This implies that the business will use its earnings from other ventures to pay down
long-term debt, which will reduce the economic worth of future investments (Gawęda [Link].,
2021). After falling to -0.002 in 2023 and then rising to -0.033 in 2024, the company's gross
profit margin in 2022 was -0.024. Since this level of profitability is poor, it is not anticipated
that the business will be financially stable for an extended length of time (Alvarez [Link].,
2022). Therefore, strategies to increase the company's operational revenues should be
developed.
Operating Profit Margin
The managers use the ratios to ascertain the operating profit or profitability level of
the business. It calculates the portion of every dollar of sales that is left over after all
expenditures and costs, aside from interest, taxes, and dividends on preferred stock, have
been subtracted (Gawęda [Link]., 2021). The higher, the better. In 2022, Oceania Healthcare's
(OCA) value was -0.024; in 2023, it dropped to -0.002, and in 2024, it rose to -0.033. Though
additional work is required to raise the Operating Profit Margin to higher levels, this rate
growth shows that the firm is gradually generating a major percentage of the gross profit
(Dumay [Link]., 2022). Reduced financial commitments are the cause of this rising rate
(Pignataro [Link]., 2022).
Return on Total Assets (ROA)
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It gauges how well management uses its available resources to produce profits
overall. The higher, the better. The charges that come up while looking for money via debts
like loans and borrowing are known as the cost of debt (Oyewo [Link]., 2022). While raising
money, there will be additional expenses in addition to the interest on those obligations.
Commitment fees, subscriptions, and transportation costs for officials seeking funding are a
few examples (Cathey [Link]., 2022). A high cost is a sign that the business is raising money
using pricey methods (Wang [Link]., 2021). The management should therefore look at the
possibilities of using less expensive alternatives to get debt financing (Gawęda [Link]., 2021).
Low costs are a sign that the business is expanding its finances effectively without raising the
high cost of capital. The company's return on assets (ROA) was 0.028 in 2022, 0.006 in 2023,
and 0.011 in 2024. This rate suggests that using debt financing is a reasonably priced way to
get money (Pignataro [Link]., 2022). Because the profits from the investment may cover the
cost of looking for finance, the business can rely more on this source to meet its financial
requirements (Alvarez [Link]., 2022).
Return on Equity (ROE)
It calculates the return on the investment made by ordinary investors in the company.
For investors, the higher the better (Oyewo [Link]., 2022). This ratio evaluates the portion of
Oceania Healthcare's (OCA) assets that are solely composed of shareholder equity. In order to
determine the inherent worth of investors' capital, it makes a distinction between the quantity
of assets that have been funded by debt (Alvarez [Link]., 2022). This will assist in calculating
the likelihood that the business may file for bankruptcy (Cathey [Link]., 2022). This has to do
with the efforts that go into raising money for a business (Wang [Link]., 2021). Among the
activities that result from equity allocations are share offerings in the capital markets and the
cost of equity transfers. According to the data, the ROE ratio for Oceania Healthcare (OCA)
was 0.064 in 2022, 0.016 in 2023, and 0.031 in 2024.
These low rates suggest that the company's financial health is weak since the majority
of its assets are held by debtors rather than investors (Alvarez [Link]., 2022). This rate suggests
that the cost of equity for the business is comparatively high. Since the capital base would be
larger and the cost of sourcing capital will be lower, public issues may enhance the low rate.
In the hands of shareholders, equity management and oversight will be outstanding, and as a
result, the price is passed on to them (Dumay [Link]., 2022). In general, the company's cost of
capital is quite high, which suggests that it is unable to support the costs of obtaining funding
(Gawęda [Link]., 2021). This high rate indicated that the company's management has
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maintained a high cost of capital and elevated risk exposure, demonstrating insensitivity to
credit risk (Pignataro [Link]., 2022).
Oceania Healthcare (OCA)
Ratios Formulae 31/12/2024 31/12/2023 31/12/2022
Liquidity:
Current assets / Current
Current ratio
liabilites 1.58 1.61 1.76
(Current assets – Inventory) /
Quick ratio
Current liabilites 1.06 1.10 1.14
Activity:
Total asset turnover Sales / Total assets 0.095 0.097 0.105
Debt:
Debt ratio Total liabilities / Total assets 0.63 0.62 0.57
Earnings before Interest and
Time interest earned ratio
Taxes / Interest Expenses -2.39 -0.96 -6.05
Profitability:
Sales - cost of goods sold /
Gross Profi t Margin
sales , = Gross profi ts / sales -0.033 -0.002 -0.024

Operating Profi t Margin

Operatng profi ts / Sales -0.033 -0.002 -0.024
Return on Total Assets (ROA) Net Income / Total Assets 0.011 0.006 0.028
Net Income / Common stock
Return on Equity (ROE)
Equity 0.031 0.016 0.064
Market ratios:
Market price per share of
P/E ratio common stock / Earnings per
share 0.011 0.005 0.010
Market price per share of
M/B ratio common stock / Book value
per share of common stock 0.989 0.995 0.990
Common stock equity /
where, Number of shares of
common stock outstanding

2. Ratios comparison on performance with two of OCA peers’ ratios

Industry Analysis
Higher liquidity risks are a result of the ratio benchmark for New Zealand healthcare
enterprises that operate in the rest home operator sector. Since Oceania Healthcare's (OCA)
current average debt-to-equity ratio is somewhat higher than the industry's suggested
benchmark, management should keep an eye on the gearing level to make sure it stays within
sustainable bounds, as this would expose the firm to a significant amount of liquidity risk
(Wang [Link]., 2021). Nonetheless, a reduced capital cost will be guaranteed by the larger
borrowed capital. In comparison to the ratios for the revenues of [Link] and RHCGF, OCA
has a low ratio value, according to the analysis of the ratios for the three companies, which is
based on the revenue for the previous three years.
In comparison to [Link], which has higher ratio values, Oceania Healthcare's lower
ratio values suggest that the company's stock has a comparatively greater level of market risk
(Gawęda [Link]., 2021). Since the profits that come with riskier investments are comparatively
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larger than those from risk-free investments, [Link] may find that a stock with a higher
level of risk is beneficial (Alvarez [Link]., 2022). [Link] and RHCGF are hazardous
investments since the firms may not provide an acceptable income if the risk connected with
the business is considerable (Oyewo [Link]., 2022). Oceania Healthcare (OCA) will be the firm
of choice for the investment as a risk-averse investor because of the investment's reduced
market risk.
Compared to Ryman Healthcare Limited RHCGF) and Summerset Group Holdings
Limited ([Link]), Oceania Healthcare (OCA) has a lower predicted market rate of return
(Cathey [Link]., 2022). This suggests that RHCGF and [Link] have better opportunities for
revenue creation than OCA (Oyewo [Link]., 2022). The two alternative enterprises' strong
market rates of return are a sign of a better-balanced portfolio, which increases profits for the
businesses while posing less operational hazards (Pignataro [Link]., 2022). In addition, Oceania
Healthcare has a better risk-free rate than [Link] (Dumay [Link]., 2022). This is a sign that
Oceania Healthcare has made more prudent investments in its risk-free investment portfolio
than its competitors (Todd [Link]., 2023). Because of the greater risk-free rate of return, a risk-
averse investor would thus think about investing in Oceania Healthcare (OCA).
Gross Profit Margin Analysis for the Industry
The percentage of sales revenue that represents net revenue is shown by the gross
profit margin ratio (Cathey [Link]., 2022). In order to calculate the ratio, the entire cost of
goods sold is subtracted from the total sales revenues (Oyewo [Link]., 2022). The amount is
then divided by the sales revenues and multiplied by 100 to represent the values as a
percentage (Alvarez [Link]., 2022). In order to better allocate resources to more productive
activities, the ratio assists the firm in calculating the number of total profits it earns from
sales produced during a trading period (Wang [Link]., 2021). This allows the company to
determine if operations are getting more costly or whether the business is becoming more
lucrative (Gawęda [Link]., 2021). The company's average gross profit margin shows that
Oceania Healthcare (OCA) has a lower gross profit margin rate than the industry's benchmark
ratios, indicating a difference in gross profit margins (Pignataro [Link]., 2022).
Oceania Healthcare (OCA) is thus operating outside of the margin of safety since its
profit margin is less than the suggested margin (Dumay [Link]., 2022). Because of the
inefficient revenue generation, which is insufficient to cover the cost of sales and retain a
significant portion of income for investors and further investments, Oceania Healthcare
(OCA) is thus not anticipated to run smoothly (Alvarez [Link]., 2022). By failing to keep
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operating costs as low as necessary for the realisation of better net revenue for a significant
competitive advantage among its peers, Oceania Healthcare (OCA) has thus failed to
maintain its operations within the necessary industry range, indicating low sales efficiency
(Oyewo [Link]., 2022).
Despite varying growth rates, the three firms' dividend yields are expected to increase
throughout the course of the three-year review of their dividend predictions (Todd [Link].,
2023). According to the estimate for dividend growth, Oceania Healthcare's (OCA) stock is
expected to rise at a greater pace (0.011%) than [Link], which is expected to grow at a
slower rate (0.004%). Because Oceania Healthcare (OCA) shares will be worth more than
those of [Link] and RHCGF (0.005%) over the same time period for equal amounts of
investments, investing in OCA shares will be more profitable over the next five years (Wang
[Link]., 2021). The five-year investment in Oceania Healthcare (OCA) is worth more because
of the company's high growth prospects, which are a result of its higher revenue projections
than those of RHCGF and [Link]. Consequently, it will be more appealing to invest in
Oceania Healthcare stock than [Link] (Pignataro [Link]., 2022).
According to the share price research, Oceania Healthcare's (OCA) stock is worth
more than that of RHCGF and [Link] better rise in the value of the company's dividend
yields is the reason for Oceania Healthcare Ltd.'s stock's better worth (Gawęda [Link]., 2021).
Since the investment is anticipated to generate more revenue through growth in the
company's value due to high-income generation anticipations for Oceania Healthcare
compared to [Link] and RHCGF, the company's higher dividend yield makes it a better
choice for investment (Oyewo [Link]., 2022). Consequently, a shareholder is likely to purchase
OCA’s stock because of the company's high stock value and the expected faster rise of the
shares' value than that of its competitors (Pignataro [Link]., 2022).
Investing in Oceania Healthcare (OCA) Ltd stock is preferred by risk-averse investors
since greater investment returns will result in more adequate revenues to offset the impacts of
inflation (Todd [Link]., 2023). The future value of revenues is impacted by inflation (Wetmore
[Link]., 2022). Investing in low-revenue projects is dangerous because of the decreased value
of the future cash flows, which might result in insufficient future income to increase
investors' wealth (Oyewo [Link]., 2022). Therefore, in order to minimise the danger of
inflation, a risk-averse investor will choose investing in Oceania Healthcare (OCA). It is very
dangerous to invest in long-term projects because of the related inflation risk (Wang [Link].,
2021). Therefore, prior to making an investment choice, it is crucial to analyse the worth of
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future income and costs (Pignataro [Link]., 2022). Future investments with high costs are risky
because investors' wealth will not increase as anticipated (Gawęda [Link]., 2021).
As a result, Oceania Healthcare is outperforming its competitors in the market and is
expanding steadily (Alvarez [Link]., 2022). The cash flow from operations study, however,
indicates a little reversal of the growing trend in cash flows that was seen from 2022 to 2024.
The sum fell sharply. It follows that the value of the elements influencing sales decreased
(short-term investments were reduced by a significant amount), which in turn caused the
value of sales to decline (Gawęda [Link]., 2021). In order to boost sales activities, Oceania
Healthcare Ltd.'s management need to think about reinvesting the same number of resources
in short-term operations (Dumay [Link]., 2022). The value of operating cash flow rises as a
result of increased funding for sales activities (Todd [Link]., 2023).
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Summerset Group Holdings Limited ([Link])

Summerset Group Holdings Limited ([Link]):
Ratios Formulae 31/12/2024 31/12/2023 31/12/2022
Liquidity:

Current assets / Current

Current ratio
liabilites 1.58 1.60 1.60
(Current assets – Inventory) /
Quick ratio
Current liabilites 1.52 1.54 1.52
Activity:
Total asset turnover Sales / Total assets 0.040 0.039 0.041
Debt:
Debt ratio Total liabilities / Total assets 0.63 0.62 0.62
Earnings before Interest and
Time interest earned ratio
Taxes / Interest Expenses -14.20 -16.38 -16.02
Profitability:
Sales - cost of goods sold /
Gross Profi t Margin
sales , = Gross profi ts / sales 0.904 0.902 0.905
Operating Profi t Margin Operatng profi ts / Sales 0.048 0.025 0.049
Return on Total Assets (ROA) Net Income / Total Assets 0.042 0.063 0.046
Net Income / Common stock
Return on Equity (ROE)
Equity 0.114 0.167 0.123
Market ratios:
Market price per share of
P/E ratio common stock / Earnings per
share 0.004 0.005 0.007
Market price per share of
M/B ratio common stock / Book value
per share of common stock 0.996 0.995 0.993
Common stock equity /
where, Number of shares of common
stock outstanding

Ryman Healthcare Limited (RHCGF)

Ryman Healthcare Limited (RHCGF)
Column5 Column1 Column2 Column3 Column4

Ratios
Formulae 31/12/2024 31/12/2023 31/12/2022
Liquidity:
Current assets / Current
Current ratio
liabilites 1.51 1.59 1.46
(Current assets –
Quick ratio Inventory) / Current
liabilites 1.56 1.64 1.50
Activity:
Total asset turnover Sales / Total assets 0.050 0.045 0.046
Debt:
Total liabilities / Total
Debt ratio
assets 0.66 0.63 0.69
Earnings before Interest
Time interest earned ratio and Taxes / Interest
Expenses 3.00 -1.01 -23.58
Profitability:

Gross Profi t Margin Sales - cost of goods sold /

sales , = Gross profi ts / sales -0.107 -0.035 0.004
Operating Profi t Margin Operatng profi ts / Sales -0.107 -0.035 0.004
Return on Total Assets (ROA) Net Income / Total Assets 0.04% 2.06% 6.32%
Net Income / Common
Return on Equity (ROE)
stock Equity 0.11% 5.53% 20.17%
Market ratios:
Market price per share of
P/E ratio common stock / Earnings
per share 0.005 0.003 0.004

Market price per share of

M/B ratio
common stock / Book value
per share of common stock 0.995 0.997 0.996

Common stock equity /

where,
Number of shares of
common stock outstanding
 11

3. The market ratios (P/E ratio and M/B ratio) of OCA and the market view about the
value of the company’s prospects of the stock price in the near future
P/E ratio
The P/E ratio calculates how much investors are prepared to spend for every dollar of
a company's profits. If the company's fundamentals are sound, low PE stocks are seen as
appealing investments (Oyewo [Link]., 2022). A high PE indicates that the market places a high
value on the company's shares, but it also makes it less appealing (Wetmore [Link]., 2022).
Based on the anticipated increase in profits per share and, in turn, the growth in price per
share, the P/E Model examines the price changes of stocks over time (Wang [Link]., 2021). An
investor will probably think about purchasing stock in a business that has the fastest share
growth (Todd [Link]., 2023). The investor's goal while investing in stocks is to increase their
wealth as much as possible (Alvarez [Link]., 2022). Consequently, the best return on
investment will be provided by purchasing stocks with the highest potential rate of price rise
(Gawęda [Link]., 2021).
According to the three businesses' profits per share prediction, Oceania Healthcare
(OCA) has better earnings per share than RHCGF and [Link]. According to the study, for
every coin that investors purchase, Oceania Healthcare's (OCA) stock will provide the
highest return when compared to its rivals (Pignataro [Link]., 2022). For a risk-averse investor,
this makes investing in Oceania Healthcare more alluring than investing in RHCGF or
[Link] (Oyewo [Link]., 2022). However, before making an investment, an investor should be
very careful when evaluating the profits per share level (Cathey [Link]., 2022). This is due to
the fact that a variety of variables influence profits per share both now and in the future (Todd
[Link]., 2023). Because of the company's prevailing favourable drivers, a share may show
strong profits per share at the present market valuation (Dumay [Link]., 2022). The current
favourable drivers, however, may not last long, and the investor can lose money as a
consequence. In a similar vein, a share with low profits at present market rates may see future
growth in earnings (Gawęda [Link]., 2021). This will increase the short-term profitability of an
investor's choice to purchase the share with lesser profits now.
However, the analysis offers no proof that Oceania Healthcare (OCA) would
outperform RHCGF and [Link] in terms of future profitability (Wetmore [Link]., 2022).
According to the pace of growth in profits per share, each company's price per share is
anticipated to rise in 2025. According to the study, the shares of OCA show a higher rate of
share price increase, and a price change will be seen during the period in comparison to the
 12

price changes of RHCGF and [Link] (Alvarez [Link]., 2022). This suggests that, over the
same time period, investment in OCA will provide larger returns than investing in RHCGF
and [Link] (Wang [Link]., 2021). Because the recovery time for investments in OCA will be
shorter than that of its peers, a risk-averse investor would thus choose investing in OCA
owing to the investment's comparatively lower risk exposer (Gawęda [Link]., 2021). Therefore,
compared to [Link] and RHCGF, the best investment choice will be to invest in OCA
because of the greater returns and comparatively lesser risk exposure owing to the shorter
collecting time (Pignataro [Link]., 2022).
M/B ratio
The M/B ratio is an evaluation of investors' perceptions of the company's
performance. The greater the M/B ratio, the higher the firm's worth relative to its book value.
Better performance, to put it another way. Analysing the trend for the company's dividend
claim settlement is also crucial (Alvarez [Link]., 2022). Even though a corporation may declare
large dividends in an attempt to draw in more investors, it fails to generate substantial
dividend income the next fiscal year (Wetmore [Link]., 2022). As a result, an investigation of
the three firms' dividend distribution habits will also be done. Investor trust is increased when
dividend payment patterns are consistent (Oyewo [Link]., 2022). Consequently, the proven
dividend payment histories will determine the optimal investment. Projected revenue growth
determines the company's stability and, in turn, its future capacity to pay dividends
consistently (Gawęda [Link]., 2021). According to the revenue growth estimates, OCA is
expected to increase its revenue at a faster rate than RHCGF and [Link]. Because the share
repayment is assured, OCA is a superior investment choice because it is more stable than its
competitors (Pignataro [Link]., 2022).
Over time, the book value of shares has continuously increased (Wetmore [Link].,
2022). However, because the book value is larger than the market value, the discrepancy
between the market value per share and the book value of shares suggests that the shares have
been underpriced in the market (Oyewo [Link]., 2022). By recommending businesses, in
particular, against taking on excessive debt, which may force them out of business, or
depending too heavily on stock capital, which could result in large tax payments, the research
seeks to maintain the stability of the firms' stock values (Alvarez [Link]., 2022). The downward
trajectory of OCA ratios over the last three years is concerning.
There are several indicators of declining financial stability. Inappropriate asset
allocations, low debt management, and declining earnings all encourage this. As a result, the
 13

percentage indicates that the business is not in a strong position to profit from its output and
does not have enough cash on hand to promptly restructure its debt (Wang [Link]., 2021).
Therefore, there is not enough cash on hand at OCA (Cathey [Link]., 2022). Because going
above appropriate bounds might put the company's cash flow at serious danger, it must be
adjusted to its mean value in order to maintain stability, and management must monitor the
degree of gearing (Alvarez [Link]., 2022). However, the increased borrowing of capital will
result in a reduced cost of capital.
The ratio predicts that the firm will see significant changes in the next years. Changes
in market pricing may generate short-term variations in operating expenses, which might lead
the anticipated amount to increase or decrease (Dumay [Link]., 2022). By examining the
difference in operating expenses, it was discovered that the predicted running costs had
changed negatively. If nothing is done, the growing expenses of doing business would soon
reach unmanageable proportions (Alvarez [Link]., 2022). Management should thus find
methods to reduce operating expenses in order to demonstrate their cost consciousness
(Cathey [Link]., 2022). A company should be able to reduce operational expenses since it offers
them a competitive advantage over rivals that spend more (Todd [Link]., 2023).
As a result, it is crucial that the leaders of the organisations do frequent studies and
other ratio analyses to assess how successfully the companies are controlling expenses and
turning a profit (Gawęda [Link]., 2021). Therefore, it is advised that management devote a
larger percentage of financial resources to the purchase of fixed assets in order to maximise
wealth development for Oceania Healthcare (Oyewo [Link]., 2022). Moreover, the
organization's operational revenue pales in contrast to its long-term financial commitments,
which are reliant on operating income (Wang [Link]., 2021). This implies that the company will
use the money it makes from other endeavours to pay down its long-term debt, which will
reduce the return on its other investments (Wetmore [Link]., 2022). Consequently, initiatives for
raising the company's operational revenue must be developed.
The required actions must be taken to guarantee that Oceania Healthcare has taken
into account the suggested suggestions and is able to fully benefit from market economies of
scale. Businesses all across the world deal with risks and difficulties in the course of their
daily operations (Cathey [Link]., 2022). Oceania Healthcare's long-term survival is in jeopardy
as a result of the risk exposure (Alvarez [Link]., 2022). Due to internal and external forces that
impact enterprises globally, the global business environment has seen a major transition in
recent years. A drop in economic activity, increasing bank rates, and high rates of inflation are
 14

examples of internal forces (Gawęda [Link]., 2021). Economic disruptions are one example of
an external factor (Dumay [Link]., 2022). The risk factors described above make Oceania
Healthcare (OCA) vulnerable to both internal and external attacks. The organisation will soon
face a business risk that requires an evaluation of its seriousness and likelihood of happening,
the implications of risk management, and a recommendation for the best course of action to
control risk exposure and enable mitigation (Todd [Link]., 2023).
 15

References:
Arvidsson, S., & Dumay, J. (2022). Corporate ESG reporting quantity, quality and
performance: Where to now for environmental policy and practice?. Business strategy
and the environment, 31(3), 1091-1110.
[Link]
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ements+analysis&ots=DxQEHC7LDP&sig=w_w8eDukGa3gbzLP-
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 17

Appendices:
Oceania Healthcare (OCA)
Income statement Breakdown

Year 31/12/2024 31/12/2023 31/12/2022 31/12/2021

Total revenue 265,463 247,178 231,140 193,646

Gross profi t 265,463 247,178 231,140 193,646
Operating expense 274,287 247,622 236,724 213,944
Operating income -8,824 -444 -5,584 -20,298
Net non-operating interest income expense -11,874 -12,556 -9,303 -6,131

Other income expense 49,091 25,000 71,144 -1,873

Pre-tax income 28,393 12,000 56,250 -28,308

Tax provision -3,081 -3,448 -4,879 -14,666

Net income common stockholders 31,474 15,448 61,129 -13,642

Basic EPS 0.04 0.02 0.09 -0.02

Diluted EPS 0.04 0.02 0.09 -0.02

Basic average shares 723,320 715,333 705,400 610,711

Diluted average shares 723,320 715,333 705,400 610,711

Net income from continuing & discontinued operation 31,474 15,448 61,129 -13,642

Normalised income 40,831 22,337.68 64,941.40 -12,529.60

Interest income 4,543 1,759 77 153
Interest expense 15,974 13,870 8,846 5,259
Net interest income -11,874 -12,556 -9,303 -6,131
EBIT 44,367 25,870 65,096 -23,049
EBITDA 63,353 43,794 83,716 -8,557
Reconciled depreciation 18,986 17,924 18,620 14,492
Net income from continuing operation net minority interest 31,474 15,448 61,129 -13,642
Total unusual items excluding goodwill -15,595 -9,569 -5,295 -1,545
Total unusual items -15,595 -9,569 -5,295 -1,545
Normalised EBITDA 78,948 53,363 89,011 -7,012
Tax rate for calcs 0.0004 0.0003 0.0003 0.0003
Tax eff ect of unusual items -6,238 -2,679.32 -1,482.60 -432.6

Balance sheet Breakdown 31/12/2024 31/12/2023 31/12/2022 31/12/2021

Total assets 2,782,348 2,544,940 2,197,689 1,548,696
Total liabilities net minority interest 1,755,892 1,582,680 1,248,846 953,484
Total equity gross minority interest 1,026,456 962,260 948,843 595,212
Total capitalisation 1,666,974 1,515,849 1,328,983 920,666
Common stock equity 1,026,456 962,260 948,843 595,212
Capital lease obligations 11,205 4,798 9,894 13,001
Net tangible assets 1,020,793 955,543 940,240 584,382
Working capital -924,531 -800,247 -776,009 -555,775
Invested capital 1,666,974 1,515,849 1,328,983 920,666
Tangible book value 1,020,793 955,543 940,240 584,382
Total debt 651,723 558,387 390,034 338,455
Net debt 633,033 546,150 370,395 307,830
Share issued 724,154.78 720,555.19 710,204.50 618,056.18
Ordinary shares number 724,154.78 720,555.19 710,204.50 618,056.18
 18

Summerset Group Holdings Limited ([Link]):

Income statement Breakdown

Year 31/12/2024 31/12/2023 31/12/2022 31/12/2021

Total revenue 318,611 270,502 236,963 202,058

Cost of revenue 30,602 26,643 22,479 18,543
Gross profit 288,009 243,859 214,484 183,515
Operating expense 272,646 237,137 202,913 172,057
Operating income 15,363 6,722 11,571 11,458

Net non-operating interest income expense -25,061 -25,795 -16,547 -11,985

Other income expense 365,460 441,553 270,093 544,164

Pre-tax income 355,762 422,480 265,117 543,637

Tax provision 15,924 -13,839 -3,955 -27
Net income common stockholders 339,838 436,319 269,072 543,664

Basic EPS 1.74 1.45 1.87 1.17

Diluted EPS 1.73

Balance sheet Breakdown

Year 31/12/2024 31/12/2023 31/12/2022 31/12/2021

Total assets 8,066,006 6,941,681 5,840,322 4,923,712

Total liabilities net minority interest 5,096,539 4,336,313 3,647,299 2,999,198
Total equity gross minority interest 2,969,467 2,605,368 2,193,023 1,924,514
Total capitalisation 4,683,807 3,998,891 3,253,517 2,671,529
Common stock equity 2,969,467 2,605,368 2,193,023 1,924,514
Capital lease obligations 11,878 14,130 15,970 12,638
Net tangible assets 2,960,991 2,596,947 2,185,772 1,917,850
Working capital -305,845 -282,703 -288,687 -313,336
Invested capital 4,683,807 3,998,891 3,253,517 2,671,529
Tangible book value 2,960,991 2,596,947 2,185,772 1,917,850
Total debt 1,726,218 1,407,653 1,076,464 759,653
Net debt 1,702,635 1,380,875 1,035,147 738,593
Share issued 236,299 234,355.66 232,162.47 229,427
Ordinary shares number 236,299 234,355.66 232,162.47 229,427
 19

Ryman Healthcare Limited (RHCGF)

Income statement Breakdown

Year

Total revenue 650,534 560,110 503,758 452,411

Gross profi t 650,534 560,110 503,758 452,411

Operating expense 720,141 579,876 501,936 427,674
Operating income -69,607 -19,766 1,822 24,737
Net non-operating interest income expense -48,316 -203,234 -30,623 -19,262

Other income expense -27,002 429,196 750,883 405,025

Pre-tax income -144,925 206,196 722,082 410,500

Tax provision -149,700 -51,640 29,209 -12,561

Net income common stockholders 4,775 257,836 692,873 423,061

Basic EPS 0.4 0.01 0.5 1.31
Diluted EPS 0.4 0.01 0.5 1.31

Basic average shares 594,916.02 687,642 516,323 530,455.97

Diluted average shares 594,916.02 687,642 516,323 530,455.97

Net income from continuing & discontinued operation 4,775 257,836 692,873 423,061

Normalised income 180,147.56 265,780.48 692,873 433,934.44

Interest income 2,326 2,140 41 103

Interest expense 50,392 205,187 30,462 18,991
Net interest income -48,316 -203,234 -30,623 -19,262
EBIT -94,533 411,383 752,544 429,491
EBITDA -50,730 457,980 788,242 461,859
Reconciled depreciation 43,803 46,597 35,698 32,368
Net income from continuing operation net minority interest 4,775 257,836 692,873 423,061
Total unusual items excluding goodwill -243,573 -243,573 -11,034 -15,102
Total unusual items -243,573 -243,573 -11,034 -15,102
Normalised EBITDA 192,843 469,014 788,242 476,961
Tax rate for calcs 0.0003 0.0003 0.0003 0.0003
Tax eff ect of unusual items -68,200.44 -68,200.44 -3,089.52 -4,228.56

Balance sheet Breakdown

Year 31/12/2024 31/12/2023 31/12/2022 31/12/2021
Total assets 13,084,082 12,510,624 10,966,082 9,171,609
Total liabilities net minority interest 8,666,475 7,846,727 7,531,562 6,342,393
Total equity gross minority interest 4,417,607 4,663,897 3,434,520 2,829,216
Total capitalisation 6,964,554 6,877,250 6,011,257 5,103,309
Common stock equity 4,417,607 4,663,897 3,434,520 2,829,216
Capital lease obligations 22,117 13,787 13,494 13,885
Net tangible assets 4,332,542 4,579,065 3,382,836 2,786,772
Working capital 440,822 328,801 328,891 362,314
Invested capital 6,964,554 6,994,847 6,011,257 5,103,309
Tangible book value 4,332,542 4,579,065 3,382,836 2,786,772
Total debt 2,569,064 2,344,737 2,590,231 2,287,978
Net debt 2,505,138 2,303,071 2,548,428 2,253,922
Share issued 687,642 685,147.46 530,455.97 530,455.97
Ordinary shares number 687,642 685,147.46 530,455.97 530,455.97