Homework: Ratio Analysis
Write 4 to 6 pages paper in which you discuss the value of ratio analysis in decision making for health care organizations. Complete the following in your paper:
1. Discuss the meaning of ratio analysis in healthcare.
2. Pick only one ratio from EACH major group from the financial statements. (e.g. Current ratio, ROE, Debt to equity, ALOS)
3. Major Groups:
• 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)
4. Discuss one 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.
You can also utilize the sample Organization financial statements or a real-life health care organization to evaluate by researching their financial statements. Show relevant calculations.
Format your homework according to the give formatting requirements:
• The answer must be using Times New Roman font (size 12), double spaced, typed, with one-inch margins on all sides.
• The response also includes a cover page containing the student's name, the title of the homework, the course title, and the date. The cover page is not included in the required page length.
• Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.