Instructions

Assessment #4: Ratio Analysis (15%)

• Write a 3-5  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.

• Format your paper consistent with APA guidelines.
• Provide a minimum of two (2) cited sources in your paper. Properly cite in APA format.