Assignment: Ratio Analysis
Unit Outcomes addressed in this assignment:
Define and understand the importance of working capital.
Identify the sources of working capital.
Course Outcome addressed in this assignment:
HA520-2: Determine how financial management concepts are used to achieve organizational goals in health
Review the “Ratio Analysis Practice Problem” to understand how ratios were calculated with 2019 data. Then, using the financial statements for Bobcat Hospital in Chapter 3, calculate the following ratios for 2020:
Collection period ratio
Days cash on hand, all sources, ratio
Days cash on hand, short-term sources, ratio
Average payment period ratio
Operating margin ratio
Total margin ratio
Return on net assets ratio
Total asset turnover ratio
Average age of plant ratio
Fixed asset turnover ratio
Current asset turnover ratio
Inventory turnover ratio
Net asset financing ratio
Long-term debt to capitalization ratio
Debt service coverage ratio cash flow to debt ratio
Indicate whether each 2020 ratio is better or worse than the 2019 ratio.
Indicate whether the 2020 ratios are better or worse than the benchmarks using the Optum medians for each ratio (see exhibit 3.5 in the text).
Examine the 2019 and 2020 ratios and assess the hospital’s financial performance. Is the hospital in better or worse financial shape in 2020 as compared to 2019?
If you were COO of Bobcat Hospital, how would you use this ratio data to make decisions for 2021?
Details: Use Excel or a table in Word to organize your answers. Use a combination of numerical and narrative answers.
Submit your assignment to the Unit 4 Assignment Dropbox.