WGU C428 Terms (Finance Resource Management in Healthcare)

vertical analysis - Answer expresses each item in a financial statement as a percentage of the same base amount Quick Ratio - Answer (Current Assets - Inventory) / Current Liabilities Current Ratio Equation - Answer current assets divided by current liabilities (Good is in-line/slightly better than industry average. Low = trouble. Industry Average is 2.0.) times interest earned ratio - Answer EBIT/Interest Expense (The larger the ratio, the better. Industry average is 5.9.) Ratios - Answer a comparison of two quantities using division Proportions - Answer two ratios (fractions) that are equal to each other "x is to y as z is to w" Inventory Turnover Ratio - Answer COGS (Total Cost of Sales)/Average Inventory debt to assets ratio - Answer Total Debt/Total Assets (good is lower than industry average. Industry standard is 63%.) AR turnover ratio Formula - Answer Net Credit Sales/Average AR (higher ratio the better)