MCKESSON CORPORATION 10
Running head: MCKESSON CORPORATION 1
November 17, 2021
Overview of McKesson Corporation
McKesson Corporation is a US-based multinational corporation specializing in the health care industry. The company mainly focus on selling care management tools, medical tools, healthcare system, and pharmaceutical products. Additionally, by 2020, the company recorded a revenue of $231.1 billion. Currently, McKesson sells 33.3 percent of its sales in North American. It has over 78,000 employees who work in different areas and departments in the country. The organization’s headquarters are situated in Irving, Texas. It mainly distributes its medical systems, pharmaceutical products, and medical supplies to other parts of the country.
Furthermore, the company offers an extensive healthcare infrastructure to healthcare organizations. It is one of the companies in the healthcare industry that adopted technologies like the use of barcode scanning for distribution, RFID tags, pharmacy robotics, and others. Pysh (2017, October 19) illustrates that McKesson had its humble beginning from 18528 when it was founded by Charles M. Olcott in New York. The company later acquired the name Olcott, McKesson, & Co, after John McKesson joined with Charles Olcott in 1833. At this time, the company began importing and wholesaling botanical drugs. In 1853, Daniel Robbins was another partner, changing the company’s name to McKesson and Robbins following the death of Olcott in the same year. In the 20th century, emerged one of the notorious companies flaunting accounting and auditing standards (Holbrook, 2020). McKesson & Robbin Corp scandal pioneered significant changes in the US auditing standards and securities regulations a few months after this scandal was unearthed in 1938 (Pysh, 2017, October 19). The company experienced a major blow after the scandal it was exposed to, resulting in the Foremost Dairies acquire that was founded James Cash Penny acquire. It was later adopted a new name by McKesson Corporation, with headquarters remaining in San Francisco. The mission of the company is to provide “products, services, and solutions of the highest quality and deliver more value to our customers that earn respect and loyalty.” The company’s separation of its business lines is the true source of its competitiveness. At first, the company operates as McKesson distribution solutions, where it distributes pharmaceutical solutions to its market. Secondly, it operates segments such as McKesson technology solutions that involve designing and providing medical devices and solutions, medical supplies, and care management products. In 2016, the common was ranked as the fifth fortune 500 company with a market capitation of 30.9 billion. The company’s revenues and its free cash flows in 2018 were approximately $198.5 billion and $4.2 billion, respectively (Pysh, 2017, October 19). Since September this year, the company shares have traded from the lows of 237.21 to highs of 257.23 (Yahoo! 2021, November 16). Also, the company’s oligopoly power offered its competitive advantage.
McKesson Corp, together with its closest competitors, am source Bergen Cop and Cardinal Health Inc. controls approximately 90 percent of the market in the United States. In particular, the company accounts for approximately a third of the medical supplies market segment in the northern part of America. The efficiencies of scale are another source of the company’s competitive advantage. It derives efficiencies of scale via its huge distributions network. It is the largest drug wholesaler in the country by revenues and operates over 31 distribution centers in the country and other 14 distributions centers in Canada. This has allowed the company to achieve operations of 99.98 order accuracy in the North American distribution and 99.90 order accuracy. The company’s huge distribution center is the source of the market barriers for the new entrants as they will require huge financial support to brand themselves in a way they can overpower it. The company has intangible assets where it owns a larger portfolio of patents, such as patents. Through these patients, the company can create barriers to trade from other new entrants in the industry. More it prevents other rival companies from mounting a challenge through introducing competing products.
Graphical Representations of Data and Steps followed in Creating A Scatter Diagram
Simple steps were followed while creating the above-represented histogram. The very first step was to identify to read the instructions carefully to identify the data sections or categories required in creating a scatter. According to the instructions provided in this exercise, an individual needs to use sketch a scatter diagram of the high stock against time in months. While creating the diagram, I selected the column of time and high stock price from the data downloaded. I clicked, inserted charts, histogram, and then double-clicked the first option. After the scatter diagram was displayed on the screen, then I formatted both axis to enter their title. Additionally, I entered the title of the scatter diagram as illustrated above. I clicked design from the main menu and selected the design of my choice. In the design menu, I clicked the ‘add chart element ‘tab and selected a trend line option.
Graphical Representations of Data and Steps followed in Creating A Scatter Diagram.
The initial step is to identify the data selections or categories required in creating a scatter. According to the instructions provided in this exercise, an individual needs to use sketch a scatter diagram of the low stock against time in months. While creating the diagram, I selected the column of time and high stock price from the data downloaded. I clicked, inserted charts, histograms, and then double-clicked the first option. after the scatter diagram displayed on the screen, then I formatted both axis to enter their title. Additionally, I entered the title of the scatter diagram as illustrated above. I clicked design from the main menu and selected the design of my choice. In the design menu, I clicked the ‘add chart element ‘tab and selected a trend line option.
Graphical Representations of Data and Steps followed in Creating A Histogram Diagram.
While creating a histogram, the following steps were considered. The first step was selecting a category that was to be included in the histogram. In this case, the data category was the daily adjusted closing stock price. After the histogram is displayed, click the design icon to select the suitable design that will be my diagram. On the same design icon, I selected the ‘add chart element’ icon and chose legend.
Graphical Representations of Data and Steps followed in Creating A Histogram Diagram
While creating a histogram, the following steps were followed. The first step was selecting a category that was to be included in the histogram. In this case, the data category was the daily adjusted closing stock price. After the histogram is displayed, click the design icon to select the suitable design that fits my diagram. I selected a black background design. On the same design icon, I selected the ‘add chart element’ icon and chose legend. On the graph title, I created the title of my histogram.
Some of the values computed in this section include the Mean, Median, Mode, and standard deviation. The mean value was computed using excel. I selected a new cell, chose the mean formula (= Average), chose all values within the chosen column, closed the bracket, and clicked enter. While computing for Mode, searched for a model formula (= Mode), selected all values within the ” adjusted daily closing stock price” column, closed the bracket, and clicked enter. Median was computed by searching its formula (= Median) selected all values in the ” adjusted daily closing stock price” column, put closing the bracket, and clicking enter. Standard deviation was computed by searching its formula (=STDEV) selected all values within the ” adjusted daily closing stock price” column, put closed the bracket, and clicking enter.
Data Analysis Section
The data collected about McKesson Corporation’s financial performance offer significant insights. To the analysts, there is much they can learn about the company’s future performance and provide important insights about its future market performance. Therefore, this stock performance information allows the management to understand the direction which the company is following and what necessary actions need to be taken (Wu, W., Wang, Y., Fu, J., Yan, J., Wang, Z., Liu, & Wang, 2019, September). From the scatter diagram, the data shows that both low stock price and higher stock performance show a gradual increase starting from November 16, 2020, to November 16, 202. Although there are minor fluctuations with the above described period, it can be deduced that the company stock price shows a gradual increase across the entire period. An increase in the stock prices increased the number of investors willing to invest in the company. The data analysis indicates that the company’s stock c price changes at a mean of $191.26. basing the company’s low stock prince and higher price performance across the period, it is obvious that the company stock is performing fairly, seeing that the highest stock price attained in the market for the last year is approximately $232.23.
Similarly, the median stock price for the company is approximately $191.38. also, the Mode of the company stock price was roughly $182.12. So, this means that $182.12 was the most recurring stock price for the entire period. After the data computation, the standard deviation was approximately $12.18(Manski, 2006). Therefore, the standard deviation illustrates the spread of the data out from the mean. It means that the stock prices spread out of the mean by $12.18. It shows that the company stock prices spread out at a wider range. In other words, it indicates that the McKesson stock price is highly volatile.
Holbrook, E. (2020). JANE SANDLER McKesson Corporation. Risk Management, 67(4), 8-10.
Manski, C. F. (2006). Interpreting the predictions of prediction markets. Economics Letters, 91(3), 425-429.
Pysh, P. (2017, October 19). The intrinsic value of McKesson Corp. Forbes. Retrieved November 16, 2021, from https://www.forbes.com/sites/prestonpysh/2017/10/18/mckesson-mck-stock-value/?sh=278d49723ed4.
Wu, W., Wang, Y., Fu, J., Yan, J., Wang, Z., Liu, J., … & Wang, X. (2019, September). Preliminary study on interpreting stock price forecasting based on tree regularization of GRU. In International Conference of Pioneering Computer Scientists, Engineers and Educators (pp. 476-487). Springer, Singapore.
Yahoo! (2021, November 16). McKesson Corporation (MCK) stock price, news, Quote & History. Yahoo! Finance. Retrieved November 16, 2021, from https://finance.yahoo.com/quote/MCK?p=MCK&.tsrc=fin-srch.