Patton Fuller Ratio Computation

Topics: Balance sheet, Asset, Liability Pages: 4 (424 words) Published: April 19, 2015


Patton-Fuller Ratio Computation
Names of the Members
HCS/405 Health Care Financial Accounting
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Patton-Fuller Community Hospital Ratio Computation 2009 and 2008

From these computations, taken from the Unaudited and Audited Reports from 2009 and 2008, if any occurred, and address what Patton-Fuller Community Hospital plans are within the next year to five years regarding any changes. In closing this paper will address the reasons that our team agrees or disagrees with the CEO’s report presented to the Board.

In addressing the ratio computations for 2009 and 2008, Unaudited and Audited reports, below, there were no significant changes between the two reports. From 2008 to 2009, the current assets decreased, but showed an increase in the hospital’s liabilities. This change affected the current ratio of the hospital, which was 15.51 to 5.41.

The drop in net receivables and cash equivalents according to the ratio computations dropped which had caused a change in the quick ratio of the hospital from 9.49:1 to 3.44:1. In reference to the hospital’s operating costs; What plans should the hospital Board make for next year and the next five years? After reviewing Patton-Fuller Community Hospital balance sheets, the balance sheets show that they break even at the end of the fiscal year. The hospital is currently making enough to cover the debts, which equals to no profit. The hospital’s Revenue needs to increase to avoid the debts of the hospital from increasing. As a team, we feel that providing quality service will in turn increase the amount of patients seen ultimately increasing revenue.

Ratios Unaudited
2009

1. Current Ratio: 128,867/23,807 = 5.41to 1
2. Quick Ratio: 22,995+59,787/23,807 82,782/23,807 = 3.48 to1 3. Days Cash On Hand: 22,995/(462,293/365) = 22,995/1,266.55 = 18.15 Days 4. Days Receivables: 59,787/(459,900/365) = 59,787/1,260 = 47.45 Days 5. Debt Service...
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