Hcs/405 Week 4 Lt Ratios

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2008 Ratio (unaudited)2009 Ratio (unaudited)2008 Ratio (audited)2009 Ratio (audited) Current RatioCurrent RatioCurrent RatioCurrent Ratio

$130,026 Assets
$8,380 Liabilities

15.52 to 1

$128,867 Assets
$23,807 Liabilities

5.41 to 1

$130,026 Assets
$8,380 Liabilities
15.52 to 1
$128,867 Assets
$ 23,807 Liabilities
5.37 to 1
Quick RatioQuick RatioQuick RatioQuick Ratio

$41,851
$37,666
$79,517 / $8,380

9.49 to 1

$22,995
$59,787
$82,782 / $23,807

3.48 to 1
$41,851 +
$37,666 / $8380
9.49 to 1
$22,995 +
$58,787 / $23,807
3.44 to 1
Days Cash on HandDays Cash on HandDays Cash on HandDays Cash on Hand

$437,424
($24,955)
$412,469 / 365 = $1,130.05

$41,851 / $ 1,130.05 = 37.04 days

$462,293
($36,036)
$426,257 / 365 =
$1,167.83

$22,995 / $1,167.83 = 19.69 days

$437,424
($1,784)
$435,640/365 =
$1193.53
$130,026/$1193.53= 108.94 days

$463,293
($1,840)
$461,453 / 365 =
$1264.25
$127,867 / $1264.25
=22.04 days
Days ReceivablesDays ReceivablesDays ReceivablesDays Receivables

$421,314 / 365 =
$1,154.29

$37,666 / $1,154.29 =
32.63 days

$462,982 / 365 = $1,972.60

$59,787 / $1,972.60 = 30.31 days
$421,314 x90%=
$379,182.67/$1038.8=
$41,851 / 365 =
40.29 days
$462,982 x 90%=
$416683.8/$1141.60=
$22,995/365 =
20.14 days
Debt Service Coverage RatioDebt Service Coverage RatioDebt Service Coverage RatioDebt Service Coverage Ratio

($15,846)
$3,597
$24,955
$12,706 /
$4,195 = 3.03%

$627
$3,708
$36,036
$40,371 /
$14,609 = 2.67%
$54,184/$4195 = 12.92$373
$3,708
$36,036 /
$14,609 = 2.7%
Liabilities to Fund BalanceLiabilities to Fund BalanceLiabilities to Fund BalanceLiabilities to Fund Balance

$213,450 / $335,035 = 0.64%
$462,153 / $126,564 = 3.65%

$213,450/$335,035 = 0.637%
$462,153/$125,564= 3.68%
Operating Margin %Operating Margin %Operating Margin %Operating Margin %

$264 /
$421,314 = 6.27%
($62) /
$462,982 = 1.34
$264/
$421,314 = .000627%($62)/
$462,982 = .000133%
Return on Total Assets %Return on Total Assets %Return on Total Assets %Return on Total Assets %

$421,314 /
$548,535 = 0.77%
$462,982 /
$588,767 = 0.79%
$264+$24,955+$3,597/
$548,535 = .052%($373)+36,036+3,708/
587,767 = .067%

Consider the financial performance before the audit and after the audit. What has changed and how significant is the change?

What plans should the hospital Board make for next year and for the next five years? The hospital Board for the next year should at the very least consider changes within the areas of days cash on hand, operating margin percent, and debt service coverage and reevaluate the policies and procedures pertaining to those areas. From 2008 to 2009, the days cash on hands lost a total of ($11, 081). In 2008 the hospital was in a constant positive whereas 2009 started in a negative and slowly rose into a positive. The hospital Board needs to keep a close eye on the operating margin percent. In 2008, the hospital lost a total of $15, 846 in debt service charges and in 2009 the hospital ensured a positive dollar amount of $627. For the upcoming year, the Board needs to keep an eye on the debt service charges as well to avoid a negative balance. For the next five years the hospital Board should keep in mind the areas of negative awareness. The hospital Board can also use comparative data from competitors to see what keeps them afloat in hardship areas.
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