OBy: David Chamberlain, Dan Clark, & Audra Lenczowski

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Mission StatementO To provide innovative, integrated health care

products and services; and to be trusted advisors and consultants to our customers - enabling them to deliver the best quality patient care and enhance their practice management efficiency and profitability.

O 80 YearsOver 190,000 Products775,000 Customers

HistoryO Henry Schein, pharmacist in 1932 opened a

corner drugstore in Woodside, NY

O By 1940’s company introduces private-brand dental, medical, and veterinary products

O By 1950 offered mail order to MD offices

HistoryO 1964 criminal complaint for selling counterfeit

Dexedrine to 3 out of state pharmacies and illegally selling amphetamine, barbiturates, and PCN tabs to an undercover federal agent

O 1970’s when mail order really took off, and when the family really focused on the dental market

O Sold his pharmacy in the mid 1970’s to become full time distributor of medical/dental and generic drugs. Annual sales at $40 million.

History

O 1980 began automating distribution through telephone or computer

O Within decade was dominant in field and by 1988 controlled more than 40% of mail order market for dental supplies

O 1990 to separate from the rest- started offering computer and financial products to dentist

HistoryO 1990’s cont. Branched out to European markets,

selling through distributor to Mexico and catalog direct to Canada

O Annual sales 1990 was $236.3 million up to $415.7 million in 1993

O Went public Nov 1995 raising $72.5 million from initial offering to $16 a share. July 96 raised an additional $124.1 million by selling more stock at $35 a share.

CurrentlyO Mostly in North America, Europe, New Zealand and

Australia

O Includes- MD practices, dental practices, labs, vet clinics, government and other institutions

O Major groups: dental (33.6% of total net sales), medical (16.6% of total net sales), veterinary health (11.6% of total net sales), international (35.3% of total net sales) and technology (2.9% of total net sales)

Awards & RecognitionO 2012 ranked #303 in Fortune® 500 for

America’s Largest Companies

O Ranked #10 in the Barron’s 500 (ranked based on deploying cash flow and growing business)

O Worlds Most Ethical Companies 2012 by Ethisphere Institute

O Worlds Most Admired Companies by Fortune® 2012

Awards & RecognitionO Henry Schein Dental ranks as one of

Wisconsin’s Top 100 Workplaces in 2012 & 2011

Current Ratio

Henry Schein current ratio for 20X1 and 20X0    

Year Current Ratioᵃ = Current Assets / Current Liabilities

20X1 1.79 = $ 2,272,508 / $ 1,271,640

20X0 1.86 = $ 2,169,302 / $ 1,168,087

ᵃBenchmark= 2.0        

Acid Test Ratio

Henry Schein acid test ratio for 20X1 and 20X0    

YearAcid Test

Ratioᵃ =

(Cash + Marketable /Securities) /

Current Liabilities

20X1 0.12 = $ 147,284 /

$ 1,271,640

20X0 0.13 = $ 150,348 /

$ 1,168,087

ᵃBenchmark= ????        

Days in Accts Receivable

Henry Schein Days in Accounts Receivable Ratio for 20X1 and 20X0

   

Steps 1, 2          

YearAverage Net Sales Revenues per Day

=Net Sales Revenues

/ 365 Days

20X1 

= $8,530,242 / 365$23,370.53

20X0 $20,621.34 = $7,526,790 / 365

           

Steps 3, 4          

YearDays in Accounts Receivableᵃ

=Net Accounts

Receivable/

Average Net Sales Revenues per /Day

20X1 38 = $888,248 / $23,370.53

20X0 43 = $885,784 / $20,621.34

Average Payment Period

Henry Schein average payment period ratio for 20X1 and 20X0

 

Steps 1, 2

         

Year

Average Cash Expense per Day

=(Operating Expenses

-Depreciation & Amortization Expenses)

20X1 $4,712.36 = $1,835,906 - $115,896 20X0 $4,208.89 = $1,637,460 - $101,214            Steps 3, 4

         

YearAverage Payment Period Daysᵃ

=Current

Liabilities/

Average Cash Expense per Day

20X1 132 = $621,468 / $4,712.36

20X0 140 = $590,029 / $4,208.89

ᵃBenchmark= Unknown        

Operating Margin

Henry Schein's operating margin for 20X1 and 20X0

   

           

Year Operating Margin =Operating Income

/Total Operating

Revenues

           

20X1 7% = $582,149 / $8,530,242

20X0 7% = $521,131 / $7,526,790

           

Return on Total Assets Ratio

Henry Schein return on total assets ratio for 20X1 and 20X0  

YearReturn on Total Assetsᵃ = Net Income / Total Assets

20X1 0.078 = $367,661 / $4,740,144

20X0 0.072 = $325,789 / $4,547,471

ᵃBenchmark= ??        

Total Asset Turnover Ratio

Henry Schein's Total Asset Turnover Ratio for 20X1 and 20X0

 

           

YearTotal Asset Turnover

=Total Operating

Revenues/ Total Assets

           

20X1 0.51 = $2,418,055 / $4,740,144

20X0 0.48 = $2,170,876 / $4,547,471

Fixed Asset Turnover Ratio

Henry Schein's Fixed Asset Turnover Ratio for 20X1 and 20X0

 

           

YearFixed Asset

Turnover=

Total Operating Revenues

/Net Plant & Equipment

           

20X1 9.22 = $2,418,055 / $262,088

20X0 8.6 = $2,170,876 / $252,573

Long-term Debt to Net Assets Ratio

Henry Schein Corp long-term debt to net assets ratio for 20X1 and 20X0

Year

Long-term Debt to Net Assetsᵃ =

Long-term Debt /

Stockholders Equity

20X1 0.15 = $ 363,524 / $ 2,433,623

20X0 0.16 = $ 395,309 / $ 2,412,957

ᵃBenchmark= ?        

Equity to Total Assets Ratio

Henry Schein net assets to total assets ratio for 20X1 and 20X0  

YearNet Assets to Total Assetsᵃ =

Stockholders Equity / Total Assets

20X1 0.51 = $ 2,433,623 / $ 4,740,144

20X0 0.53 = $ 2,412,957 / $ 4,547,741

ᵃBenchmark= ?        

ConclusionO Henry Schein is the largest supplier

of healthcare products

O At first glance, the 80 year old company looks rock solid

O Its balance sheet has $4.8 billion in assets and only $1.9 billion in liabilities.

ConclusionO 5 notable key weakness include:O 1. Current Ratio = 1.79% (↓0.07)

O To improve increase assets or decrease current liabilities

O 2. Acid Test Ratio = 12% (↓1%) O Not much instantly available cash O Increase cash and marketable

securities or decrease current liabilities

ConclusionO 3. Average payment period ratio =

132 days (↑ 8 days) O 132 to make payments seems

excessive

O 4. Operating margin = 7% (−0%) O Decrease its operating expenses

while growing operating revenue.

ConclusionO 5. Total asset turnover ratio = 0.51

(↑ 0.03) O 2 years to make back invested money

O Very successful company over the years

Questions

Thanks for your time and

attention!

BibliographyHenry Schein | Investor Relations | About Henry Schein. (n.d.). Henry Schein | Investor Relations | Investor Relations. Retrieved January 6, 2013, from http://investor.henryschein.com/phoenix.zhtml?c=74322&p=aboutus&hsi_domain=www.henryschein.com&hsi_locale=us-enSchein, w. b., management, w. a., 1995, d. i., & Corporation, a. i. (n.d.). History of Henry Schein, Inc. – FundingUniverse. Find Funding with Banks, Investors, and Other Funding Sources | FundingUniverse. Retrieved January 6, 2013, from http://www.fundinguniverse.com/company-histories/henry-schein-inc-history/Zelman, W., McCue, M., & Glick, N. (2009). Financial managment of health care organizations. (3rd ed., pp. 1-568). San Francisco, CA: Jossey-Bass