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Eight Basic Ratios Used in Health Care Essay Sample

Eight Basic Ratios Used in Health Care Pages
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Debt Service Coverage Ratio (DSCR) is figured Unrestricted Net Assets + Interest + Depreciation / Maximum Annual Debt Service DSCR 2009 (Audited)
36,036 + 3,708 + 373 = 40,117
40,117 / 14,609 = 2.74
DSCR 2008 (Audited)
24,995 + 3,597 + 15,846 = 44,438
44,438 / 4,195 = 10.59
Disagree:
Evaluation of the Chief-Executive-Officer (CEO) report to the board is not accurate. Patton-Fuller was more profitable in 2008. Patton-Fuller’s annual debt was less in 2008 and Patton-Fuller’s liabilities almost double in 2009 from 2008. Patton-Fuller is paying more to liabilities and expenses and their revenue is not equal to their expenses. Patton-Fuller was more profitable in 2008. Liabilities to Fund Balance

6. Liabilities to Fund Balance is figured Total Liabilities / Unrestricted Fund Balances Liabilities to Fund Balance 2009 (Audited)
462,153 / 125,564 = 3.68
Liabilities to Fund Balance 2008 (Audited)
213,450 / 335,035 = 0.637
Disagree:
The Liabilities to Fund Balance shows that Patton-Fuller was more profitable in 2008 than in 2009. The liabilities increase significantly from 2008 to 2009 indicating that Patton-Fuller has increased their expenditures. Patton-Fuller’s net worth also declined tremendously. When analyzing this ratio the lesser the number the better the profitability of the company. Patton-Fuller shows a decrease from 2008-2009 meaning the hospital was not as profitable in 2009 as it was in 2008. Financial Performance of Patton-Fuller

Patton-Fuller has generated a small net income increase from 2008-2009. Patton-Fuller operating income decreased significantly from ($16,110) in 2008 to ($311) in 2009. Patton-Fuller needs to look at increasing their revenue and decreasing costs. In the next five years, the board may want to look into obtaining a fixed rate loan to pay the debt that Patton-Fuller owes.

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