Financial Statement of Teladoc Company

Topic: Financial Management
Words: 631 Pages: 2


Even though Teladoc is now rightfully considered one of the leading companies in the telehealth market, the financial performance of the company compared to the enterprises in the health industry market remains rather questionable. Hence, when speaking of liquidity, such ratios as current ratio, collection period, days cash-on-hand, and average payment period were calculated. The current ratio of Teladoc, estimated by the correlation between the company’s current assets and its current liabilities, is 3,83. This financial indicator is unprecedentedly high compared to the industry’s average of 1,66 (“Health services,” n.d.). The collection period which stands for the number of days required for the company to earn its receivables back constitutes 125 days, which is a long period compared to the established average of one month. With available cash of nearly $0.826B, Teladoc’s cash-on-day accounts for nearly 760 days to operate in case of no revenue generation. The average payment ratio estimates that it will take a company nearly 275 days, or less than a year, to pay its vendors for the made-on-credit purchases.


As far as profitability is concerned, the company is yet to become to yield revenue due to the novelty of the market. Hence, the operating margin of the company, which stood for the income-to-revenue ratios and calculated the profitability of the company after operating expenses, accounted for (46)% due to a negative operating income of ($506) million. The total margin of Teladoc is (43)%, and these two indicators are considerably lower than those currently existing in the health industry market. The return on assets ratio, or ROA, is (4,6)%, which is slightly lower compared to the (2.2)% average market margin (“Health industry,” n.d.). Thus, it is reasonable to assume that the company’s profitability rates are currently the weakest point for Teladoc.

Asset Efficiency

In the context of asset efficiency, the total asset efficiency, or turnover, which stands for the ratio of total revenue to total assets, marks 0.03 for Teladoc. The age of the plant for the company is two years, which means that the company’s fixed assets are two years old on average, as the company and the business segment, in general, are relatively young. The current asset turnover of the company, calculated by dividing net sales by average current assets, is 0.14, which is lower than expected in the market. The fixed asset turnover is approximately the same with a 0.05 margin because the company itself is relatively young and has a similar year-to-year asset turnover ratio. Finally, the inventory turnover for the company, calculated by the division’s annual sales ($154,052,000) by the average inventory balance ($56,000,000), is 2 (“Annual report,” 2021). This number indicates overstocking for the company.

Capital Structure

Finally, the capital structure of the company, focusing mostly on debt data, comprises long-term debt capitalization, net asset financing, debt service coverage, and cash flow to debt. The first indicator, long-term debt to capitalization, demonstrates the ratio of the long-term debt and profit of the company, and this ratio indicates 0.07, which is quite promising for the enterprise. Net asset financing stands for the ratio of total assets and total liabilities, constituting 9.3%. The debt service coverage that accounts for the company’s EBITDA divided by an annual interest paid for long-term debt constitutes (46), accounting for the company’s low ability to generate income compared to the interest paid annually. Finally, the cash flow to debt ratio is 6%, indicating that Teladoc would need much time to repay its debt with the present patterns of income. Having considered these indicators, it can be concluded that currently, due to innovativeness and young age, the company tends to invest more money than it generates from the customers. Hence, it is imperative to find ways to automate services and manufacturing processes to generate more cash per asset.


Annual report 2020. (2021). Teladoc Health. Web.

Health services: Average industry financial ratios for U.S. listed companies. (n.d.). Ready Ratios. Web.

Teladoc Health financial statements 2013-2021 | TDOC. (n.d.). Macrotrends. Web.

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