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Introduction
Laboratory Corporation of America Holdings, also known as LabCorp, is leading in the world’s healthcare diagnostics, providing clinical laboratory services through LabCorp Diagnostics. This company operates in the Americas, Europe, and Asia; whiles its headquarters in locally in Burlington, North Carolina. They are company that provide jobs to many and have over 36,000 employees as of December 31, 2014 (Laboratory Corporation of America Holdings SWOT, 2015, pp. 3). As an investor, there are several financial factors to consider and evaluate, such as liquidity, profitability, solvency in relation to the LabCorp’s performance.
Liquidity
LabCorp during the year of 2014 took on Project Launchpad, which…show more content… The company recorded revenues of $6,011.6 million, which was an increase of 3.5% over the 2013 year (Laboratory Corporation of America Holdings SWOT, 2015, pp. 3). However, the operating profit of the company was $910.4 million in 2014, which was a decrease of 8.1% compared to 2013 (pp. 3). Every company has its financial ups and downs. LabCorp’s strength is that they have a strong cash position, which enables the company to launch new clinical laboratory testing choices and…show more content… This acquisition will strengthen LabCorp’s position in the market within the specialty testing services. Although, Quest Diagnostics is always a major competitor for LabCorp, since they compete for similar customers. Quest and LabCorp competed for exclusive lab contracts with large private insurers. One example of this was demonstrated in New Calls for Medicare Lab Competitive Bidding (2012) that in 2007, United Healthcare had 25 million members sign a 10-year contract with LabCorp that extended through 2018 (pp. 5). The other company Aetna had 17.5 million members sign the same contract, but with Quest instead (pp. 6). This is described as competitive bidding when laboratory companies compete for exclusive insurance contracts in the market. Competitive bidding is crucial since national and regional labs have shunned these types of markets. Therefore, leaving only small local testing facilities to service small populations such as nursing homes and homebound beneficiaries (pp. 6). Local labs have a great dependence on Medicare revenue to
