1. Home
  2. General Accounting
  3. Ratio Analysis

Ratio Analysis

I am looking at ratio analysis's of two hospitals A and B. I am trying to find its strengths, weaknesses and make recommendations. I know that they need to invest more money so they do not have as much cash on hand but all of this confuses me. If anyone could help me I would appreciate it.!!! Hospital A is in the column on the left and B is on the right. Thanks

Liquidity ratio Current ratio 4.875 3.400 Collection period ratio 114.196 59.700 Days cash on hand,(short-term) 13.930 29.700 Days cash on hand, all sources 36.797 108.600 Average Payment period ratio 114.063 56.000

Capital Structure ratios Net asset financing ratio 0.048 0.535 Debt service coverage ratio 1.046 2.910 Cash flow to debt ratio 0.051 0.168 Asset efficiency ratios Total asset turnover ratio 0.710 0.890 Age of plant ratio 5.165 9.080 Fixed asset turnover ratio 0.694 2.150 Current asset turnover ratio 2.147 3.400 Inventory turnover ratio 10.770 63.580 Profitability ratios Total margin -0.029 0.021 Return on net assets -0.424 0.039

Reply to
hamurphy04
Loading thread data ...

All of that is great, but what are the costs per encounter at each? That right there will tell you more about the operating efficieny than all of those ratios. I would guess that A has a much higher cost per encounter than B. That, and B has a collection period much shorter than most, almost unrealistic. Is this for class?

You should be able to determine the problems based on the ratios.

Reply to
brecker

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.