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Essential Financial Ratios In Healthcare

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Essential Financial Ratios In Healthcare
The article is all about the essential financial ratios to evaluate the health care industry such as hospitals and pharmaceutical company regardless of the stock of health care companies. There are three key ratios such as cash flow coverage ratio, debt to capitalization ratio, and operating margin. These ratios reveal how many liabilities and how much debt the health care companies have and how much they operate a margin. First, the cash flow coverage ratio is crucial to hospitals and having adequate cash flow is critical to their economic existence. This ratio equals to 1 or greater than 1 more favorable. Second, the debt to capitalization ratio is important for assessing firms that have substantial capital outflow. The ratio indicating
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