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Ratio Analysis
Resources: Ch. 11 of Health Care Finance, Doctors Smith and Brown Statement of Net Income and Balance Sheet
Use the Axia Material: Ratio Analysis Form to complete the following:
Define each of the following ratios:
o Current ratio
o Quick ratio
o Debt service coverage ratio
o Operating margin
o Return on total assets
Explain the purpose of each ratio.
Compute the following ratios from Drs. Smith & Brown’s financial statements located on the student website:
o Current ratio
o Quick ratio
o Debt service coverage ratio
o Operating margin
o Return on total assets
Explain what these ratios tell you about the status of the organization. Compare to the median hospitals. See the table in the Axia Material: Ratio Analysis Form.
Cite your references where indicated consistent with APA guidelines.
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