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)
- 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)
- 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.
You can also utilize the sample Help4UHMO Organization financial statements (located under week 6) or a real-life health care organization to evaluate by researching their financial statements. Show relevant calculations.
- Format your paper consistent with APA guidelines.
- Provide a minimum of two (2) cited sources in your paper. Properly cite in APA format.
You will be graded base on the following rubric: