Question

Using one financial ratio discussed, show how you would use it to analyze the financial position of a health care facility or department. Include current benchmarks in your discussion.

Answer 1

ANSWER :
The Health sector is one amongst the biggest market sectors, encompassing a range of industries like hospitals, medical instrumentation. trailing and analyzing monetary ratios could be a important observe for health care organizations.monetary magnitude relation trailing is effective for everything from atiny low personal observe to massive hospital systems.Some key monetary magnitude relations investors and market analysts use to judge firms within the aid sector embody the income coverage ratio, the debt-to-capitalization magnitude relation, and operative ratio.

Cash Flow Coverage magnitude relation;

This magnitude relation is calculated by dividing operative income, a figure that may be obtained from a company’s income statement, by total debt obligations. It reveals a company’s ability to satisfy its funding obligations. it's conjointly a magnitude relation thought-about significantly necessary by potential lenders and so impacts a company’s ability to get further funding, if necessary. A magnitude relation of one is mostly thought-about acceptable, and a magnitude relation over one a lot of favorable. A magnitude relation adequate to one or quite one implies that the corporate is in sensible monetary health and it will meet its monetary obligations through the money generated by operative activities.The income coverage magnitude relation could be a sensible general analysis metric, however it also can be significantly necessary for businesses like hospitals and medical practices. as a result of such firms should typically wait substantial periods of your time to get monetary compensation from insurance firms or government agencies, having enough income and sensible income management is important to their monetary survival.