MAXIMUS NYSE MMS
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OnSeptember 18, 1975, MAXIMUS was established in Great Falls, Virginia,at the basement of David Mastran’s house. The company was the firstto ever privatize the social welfare program of the government in1988. MAXIMUS changed the way government handled its privilegeprogram for the marginalized society. At present, MAXIMUS is thebiggest social welfare company privatized in the United States. Afterthe establishment of MAXIMUS, it obtained its first Medicaidagreement and extended its staff. The company continued to developand went public a decade later.
Thecompany is driven by the same objective which is to enhance the livesof the people it serves in the aspects of child welfare, health care,education, and employment. For over four decades, along withgovernment partners, the company has developed and handled innovativehealth as well as human service programs that have changed the livesof the people and strengthened the communities. The company operatesin two segments namely human services and health services. The healthservice aspect offers varied business procedures for provincial,federal, and state programs including the Medicaid, Affordable CareAct, Children’s Health Insurance Program, Health Insurance BritishColumbia Program, and Medicare. This segment encompasses healthinsurance program eligibility as well as enrolment services,government health insurance program administration, health insuranceexchange design and operations, consumer outreach, applicationassistance, education, independent enrolment counseling, independenthealth appeals, administration, payment processing, and independentmedical reviews, eHealth solutions, health plan oversight, andprogram consultation services. MAXIMUS Inc’s competitors includeAccenture and Xerox Corporation. Accenture has a market cap of 50.87Bwhile Xerox Corporation has a market cap of 13.63B.
Thispaper presents the ratio analysis of the company from 2011 to 2013.Current ratio is the proportion between the company’s assets andthe company’s liabilities. Through the current ratio, it becomesknown whether the company has the ability to settle its debt over thenext one whole year. The higher the current ratio, the greater is thecapacity of the company to settle its debt. In 2011, the company’scurrent ratio is 2.4. In 2012 and 2013, the company’s current ratiois 2.25 and 1.87 respectively. This signifies that gradually, thereis reduction in the company’s asset and increased in liabilityhence producing a decrease in current ration in 2012 and 2013.Compared to the industry’s current ratio which is 1.8, in 2013, thecompany is still in an acceptable position. However, it must strivehard to increase its asset. Days Sales Outstanding pertains to theaverage number of days that the company is able to collect revenuefollowing the sale. Low day sale outstanding signifies that thecompany takes fewer days to gather its account receivable. A high daysale outstanding signifies that the company takes more number of daysto have all its account receivable collected. From 2011 to 2013,MAXIMUS’ day sales outstanding are 65.58, 65.01 and 80.42respectively. Quick ratio pertains to the company’s ability to makeuse of its assets quickly to settle its current liabilities. Thegreater the quick ratio, the more positive is the quick ratioimplications to the company. From 2011 to 2013, MAXIMUS’ quickratio is 2.29, 2.25 and 1.86 respectively. Operating margin, on theother hand, is computed to determine what portion of the revenuethere is left after settling the variable prices of productionincluding raw materials and wages. An excellent profit margin isneeded for a company to be able to settle its fixed costs includinginterests on debts. From 2011 to 2013, MAXIMUS’ operating margin is13.40%, 12.60%, and 14.20%. Profit margin is usually determined andcompared to the industry to know whether the company is profitable orhas better management over its costs. From 2011 to 2013, MAXIMUS’profit margin is 7.39%, 7.45%, and 8.33%. From the results, it can besaid that for two consecutive years, MAXIMUS’ performance is nottotally doing well as evident in its decreasing ratios.
Chartof the Company’s Stock Price
Thechart above shows the stock price of the company from December 31,2010 to December 31, 2013. The lowest stock price was on October 2011while the highest was during October of 2013.
Thischart shows the stock price of MAXIMUS from January 2, 2014 to April2, 2014. The lowest stock price was on February 3 while the highestwas during the period between February 6 and February 10.
BruceCaswell, a MAXIMUS Insider, sold its share of 18,799 last April 2,2014. The shares were sold at $44.67 and the transaction amounted toa total of $839,751.33. On the other hand, EVA Dimensions analystshave upgraded the company’s shares from a hold to an overweightrating. As of the moment, the company’s stock is doing well and issold at $44.46. Recommendation from analysts state that investorsshould buy MAXIMUS Stocks.
Davis,S. (2014). InsiderSelling: Bruce Caswell Sells 18,799 Shares of MAXIMUS Stock (MMS) |WKRB News. [online] Retrieved from:http://www.wkrb13.com/markets/286670/insider-selling-bruce-caswell-sells-18799-shares-of-maximus-stock-mms/[Accessed: 3 Apr 2014].
Finance.yahoo.com.(2014). MMSAnalyst Opinion | Maximus, Inc. Common Stock Stock – Yahoo! Finance.[online] Retrieved from:http://finance.yahoo.com/q/ao?s=MMS+Analyst+Opinion [Accessed: 3 Apr2014].