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What to Expect from Amedisys in 2018

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Strides made in 2017

In fiscal 2017, Amedisys (AMED) made substantial strides in its goal of the clinical distinction of having 88% of the company’s care centers have more than four stars in the Home Health Compare release of January 2018. It achieved planned reductions in operating expenses after the completion of its homecare home-base rollout and witnessed a 37% increase in operating income in fiscal 2017 compared with fiscal 2016.

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In fiscal 2017, Amedisys exceeded 7,000 in hospice average daily census and lowered its business development staff vacancy rate to 1% and its voluntary turnover rate to 22%. Additionally, Amedisys completed its home health division restructuring plan. This plan is expected to generate $7 million to $9 million in annual savings.

Strategy for 2018

Amedisys has focused on key parameters to continue on the growth trajectory in fiscal 2018. These include:

  • continuing to build its industry-leading hospice platform by exploring different opportunities for growth including small as well as large acquisitions
  • continuing to focus on avenues for organic as well as inorganic expansion in all three of Amedisys’s business segments
  • continuing to achieve clinical distinction with a goal of achieving a four-star quality rating
  • improving productivity through increased proficiency in HCHB, productivity staffing tools, and standardized scheduling processes
  • continuing to focus on margin improvement in Amedisys’s underperforming care centers

Valuation metrics

The return on assets, return on equity, and return on investment metrics for Amedisys currently stand at 3.8%, 6.1%, and 8.2%, respectively. The price-to-sales ratio of the company is 1.3 and the price-to-book value ratio is four. Amedisys is well positioned to meet its short-term liabilities with a healthy current ratio of 1.4 and the debt-to-equity ratio of the company is at a healthy 0.17.

In the next part of the series, we’ll take a look at the financial performance of Amedisys.

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