Ratio Analysis


H

hamurphy04

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
 
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B

brecker

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.
 

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