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:
Discuss the meaning of ratio analysis in healthcare.
Pick only one (1) ratio from EACH major group from the financial statements. (e.g. Current ratio, ROE, Debt to equity, ALOS)
Liquidity ratios (Current ratio, Days Cash-on-Hand, Quick Ratio)
Profitability ratios (ROE, ROA, Total Margin, Operating Margin)
Leverage/Capital Structure Ratios (Debt ratio, Equity ratio, Debt to Equity Ratio)
Nonfinancial Ratios (Occupancy rate, payer mix, ALOS, Expense per discharge, FTE per bed, HMO penetration)
Discuss one (1) ratio (from EACH major group) using the following criteria:
What is the meaning of each ratio?
Evaluate the meaning of the ratio related to the financial health of the health care organization. Show the calculations.
Explain the factors that affect the results related to the financial health of the organization.