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Hcs 440

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Ratio Computation
HCS 405, University of Phoenix
November 5, 2012
Diana Schilling

Eight Basic Ratio’s Used in Health Care
Liquidity Ratios 1. Current Ratio: Current Assets/Current Liabilities
UNAUDITED:
2009: $128,867/$23,807 = 5.41
2008: $130,026/$8,380 = 15.52
AUDITED:
2009: $127,867/$23,807 = 5.37
2008: $130,026/$8,380 = 15.52

2. Quick Ratio: Cash & Cash Equivalents + Net Receivables/Current Liabilities
UNAUDITED:
2009: $22,995 + ($59,787-$10,757)/$23,807 = 3.03
2008: $41,851 + ($37,666-$6,777)/$8,380 = 8.68
AUDITED:
2009: $22,995 + ($58,787-$11,757)/$23,807 = 2.94
2008: $41,851 + ($37,666-$7,533)/$8,380 = 8.59

FINDINGS: I do not disagree with the CEO’s report to the Board. The unaudited and audited reports are very similar in their ratios. The audited reports show more validity to the numbers and should be looked at more than the unaudited reports. I believe that the next year and next five years can be based on either ratio and the board can get the budget for the next few years pretty close to what they need to be.

3. DCOH: Unrestricted Cash & Cash Equivalent/(Cash Operation Expenses/365)
UNAUDITED:
2009: $22,995/($462,293/365) = 18.2
2008: $41,851/($437,424/365) = 34.9

4. Days Receivable: Net Receivable/(Net Credit Revenue/365)
UNAUDITED:
2009: $59,878/($462,982/365) = 47.13
2008: $37,666/($421,314/365) = 32.63

Solvency Ratios 5. DSCR: Change in Unrestricted Net Assets + Interest, Depreciation, Amortization/Maximum Annual Debt Service
UNAUDITED:
2009: $627 + $3,708 + $36,036/$14,609 = 2.76
2008: $627 + $3,708 + $36,036/$14,609 = 2.76

6. Liabilities to Fund Balance: Total Liabilities/Unrestricted Fund Balances
UNAUDITED:
2009: $462,153/$126,564 = 3.65
2008: $213,450/$335,035 = .637
AUDITED:
2009: $462,153/$125,564 = 3.71
2008: $462,153/$335,035=1.37

Profitability Ratios 7.…...

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