MHA 706 MODULE 3 EXAM QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS VERIFIED
Ratio Analysis
technique used in financial condition analysis
Financial ratio analysis
combines values from the financial statements to create single numbers that facilitate
comparisons
Profitability ratio
answers the question- is the business generating sufficient profits
Liquidity ratio
can the business meet its cash obligations or debts
Debt management ratio
answers whether the business is using the right mix of debt and equity
Asset Management
looks at whether the business has the right amount of assets for the patient volume that
it has.
Total margin
net income /total revenue
Operating margin
operating income/operating revenue
ROA
net income/ total assets
, ROE
net income/ total equity
Return on assets
for every dollar that we invested in assets, the hospital generated about $__ in net
profit.
Return on equity
for every dollar invested by the owners or the community in this case, the hospital is
generating about $__ in net profit.
With the debt ratio
the higher the number it's worse. So you want lower values. While in the times interest
earned, higher are better.
FA turnover
total revenue (net operating + nonoperating)/ net fixed assests
TA turnover
total revenue (net operating + nonoperating)/ total assets
Days in patient accounts receivable
Net patient accounts receivable/(net patient service revenue/365)
when we look at the fixed asset and total assets turnover,
higher values are good
when it comes to the days in patient accounts receivable,
lower values are good
Dupont analysis
summarizes and highlights a business's financial condition
COMPLETE SOLUTIONS VERIFIED
Ratio Analysis
technique used in financial condition analysis
Financial ratio analysis
combines values from the financial statements to create single numbers that facilitate
comparisons
Profitability ratio
answers the question- is the business generating sufficient profits
Liquidity ratio
can the business meet its cash obligations or debts
Debt management ratio
answers whether the business is using the right mix of debt and equity
Asset Management
looks at whether the business has the right amount of assets for the patient volume that
it has.
Total margin
net income /total revenue
Operating margin
operating income/operating revenue
ROA
net income/ total assets
, ROE
net income/ total equity
Return on assets
for every dollar that we invested in assets, the hospital generated about $__ in net
profit.
Return on equity
for every dollar invested by the owners or the community in this case, the hospital is
generating about $__ in net profit.
With the debt ratio
the higher the number it's worse. So you want lower values. While in the times interest
earned, higher are better.
FA turnover
total revenue (net operating + nonoperating)/ net fixed assests
TA turnover
total revenue (net operating + nonoperating)/ total assets
Days in patient accounts receivable
Net patient accounts receivable/(net patient service revenue/365)
when we look at the fixed asset and total assets turnover,
higher values are good
when it comes to the days in patient accounts receivable,
lower values are good
Dupont analysis
summarizes and highlights a business's financial condition
