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AdaptHealth Corp. CIK: 0001725255 SEC EDGAR Link: Inline XBRL Filings (sec.gov) Company’s Website: Home – AdaptHealth https://adapthealth.com/ About the Company: Adapt Health Corp. is a medical equipment manufacturing company. The equipment includes afflovest, bath safety, breast pumps, hospital bed and accessories, nebulizers, non-invasive and invasive vents, etc. The company supply medical equipment in 47 states of the US. AdaptHealth Corp. has planned to acquire AeroCare for c. $2 billion of which $1.1 billion will be paid in cash to the shareholders of AeroCare and 31 million common shares amounting to $926 million will be given. The purchase price represents a multiple of 2021E EBITDA of 8.8x and 2021E EBITDA less Patient CapEx of 17.6x (7.2x and 12.3x respectively, including synergies). Regarding the revenue, the company had an annual revenue growth of 33% CAGR from 2016 to Q3 of FY2020. Further, 47% of the revenue of the company comes from sleep equipment and 31% from respiratory equipment. In FY2021, the company had a net profit of $158,153 as compared to a loss of c. $194,086 in FY2020 and loss of c. $22,601 in FY2019. References: Investor Presentation. adapthealth.com. (2020). https://www.adapthealth.com/wp-content/uploads/2020/11/AHCO-Investor-Presentation_12.1.2020_vF.pdf Inline XBRL Filings. U.S. Securities and Exchange Commissions. (2017). https://www.sec.gov/structureddata/osd-inline-xbrl.html Draft Proposal: Capital Budget Item Selection and Opportunities Available for Proposal Introduction Adapt Health Corp. is a medical equipment manufacturing company that supplies various types of medical equipment such afflovest, bath safety, breast pumps, hospital bed and accessories, nebulizers, non-invasive and invasive vents, etc. (Adapt Health, 2020). Their supplies go to 47 different regions of the United States across 760 locations including urban and rural area. Their revenue generated in 2021 from different product categories include 47% sleep supplies and equipment, 31% respiratory, 11% home medical equipment (HME), 11% other equipment (Investor Presentation, 2020). Adapt Healthcare has also acquired Aero care to become market leader in supplying medical equipment for chronic diseases such as diabetes and respiratory diseases. Opportunities Chronic diseases such as heart diseases, respiratory diseases, diabetes, and cancer are the leading causes of death and disability in the world. In the United States alone $3.8 trillion goes in maintaining annual health costs (About Chronic Diseases, CDC, 2021). Based on the above analysis, Adapt Health Corp can start to supply equipment needed for other chronic diseases such as heart diseases and cancer. It is already supplying medical equipment for respiratory diseases and diabetes. A major part of revenue is generated from them. The budget can be made to incorporate manufacturing of equipment for heart diseases and monitoring, as well as equipment to monitor cancer diseases. Proposal Adapt Health Corp. health care organization thrives in a very competitive environment as it deals with different types of patients, approximately 17 million (Investor Presentation, 2020), and their varied needs. After acquisition of Aero care, it proposes that just 19% of the product mix is respiratory. Considering the present scenario of COVID-19, the company can increase the production of respiratory supplies to meet the shortcomings (as seen with Covid-19 wave 1 and 2). References Adapt Health. (2020, December 22). Products & Services. https://adapthealth.com/products-services/ About Chronic Diseases | CDC. (2021, April 28). Centre for Disease Control and Prevention. Retrieved March 29, 2022 https://www.cdc.gov/chronicdisease/about/index.htm Investor Presentation. (2020, December 1). Https://www.Adapthealth.Com/. Retrieved March 30, 2022 https://www.adapthealth.com/wp-content/upl Milestone Four: Finance, Budget, and Justification In Module Six, you will submit a draft proposal for Sections II and III. You will provide financial statement analyses, profitability ratios, and ratio analyses to support the capital budget proposal formulated in Milestone Three. You will also use financial calculations to support proposal recommendations and to explain the short and long-term financial impact for the organization. The format should be a minimum of 2 pages in length. II. Financial and Budgetary Considerations A. Financial Statements: What financial statements will you utilize in making your proposal, and how will you use these statements? B. Proposal Impact: What impact will your proposal have on the organization’s financial statements? Articulate the impact using appropriate terminology . C. Flexed Versus Fixed: How would your proposal be different if using a flexed budget versus a fixed budget? In other words, how would the use of one type of budget versus the other impact your proposal, and how would your proposal impact the budget? (Evaluate the differences between a fixed and a flexed budget.) III. Proposal Justification A. Ratio Selection: What ratios will you use to support your proposal and why? Select the ratio or ratios that would be the most appropriate. B. Ratio Results: Calculate the selected ratios and articulate the results using accurate terminology. What do the results tell you about the viability of your proposal? C. Short- and Long-Term Impact: Based on your calculations and financial statement analysis, determine the short-term and long-term impact on the organization and the organization’s financials. What is the short-term and long-term financial impact of your proposal for the organization? How can you plan to strategically mitigate the impact on the financials of the company, or how will your proposal help inform strategic planning in the short and long term?