Instruction
Assessment #4: Ratio Analysis (15%)
• Write a 4-6 page paper in which you discuss the value of ratio analysis in decision making for health care organizations. Complete the following in your paper:
o Discuss the meaning of ratio analysis in healthcare.
o Pick one (1) ratio from each major group from the financial statements.
o Liquidity ratios (Current ratio, Days Cash-on-Hand, Quick Ratio)
o Profitability ratios (ROE, ROA, Total Margin, Operating Margin)
o Leverage/Capital Structure Ratios (Debt ratio, Equity ratio, Debt to Equity Ratio)
o Nonfinancial Ratios (Occupancy rate, payer mix, ALOS, Expense per discharge, FTE per bed, HMO penetration)
o Discuss the ratio and provide examples with calculations
o Evaluate the meaning of the calculations related to the financial health of the organization.
o Explain the factors that affect the results.