Longwood Community Hospital Financial
Columbia Southern University
HCA 5301: Health Care Financial Management
Longwood Community Hospital Financial
Liquidity Ratios: (in thousands) for the years ended December 31, 20X1 and 20X0
Current Ratio = Current Assets / Current Liabilities
Current Ratio (20X1): 3.22
Current Ratio (20X0): 2.37
Acid Test = (Cash Equivalents + Marketable Invest + Account Receivable) / Current Liabilities
Acid Test (20X1): (9500+15000) / 8650 2.83
, Acid Test (20X0): (7500+13500) / 10250 2.04
Liquidity ratios measure a facility’s ability to maintain a cash position, collect
receivables, and done all while meeting a short‐term obligation (Zelman et al., 2020, p. 152).
When evaluating the financial performance of liquidity ratio, it is crucial because a higher value
means greater ability to pay obligations. The Longwood Community Hospital’s financial
performance shows that the organization had improvement in liquidity over the year. In year
20X1, the current ratio has increased by over 0.85 and the acid test percentage has increased
from the previous year by 0.79. This data shows that Longwood Community has demonstrated
adequate liquidity, hopefully leading to more success in the next year.
Activity Ratios: (in thousands) for the years ended December 31, 20X1 and 20X0
Total Asset Turnover Ratio = Total Operating Revenue / Total Assets
Total Asset Turnover Ratio (20X1) 0.97
Total Asset Turnover Ratio (20X0) 0.96
11:18:06 GMT -05:00
Columbia Southern University
HCA 5301: Health Care Financial Management
Longwood Community Hospital Financial
Liquidity Ratios: (in thousands) for the years ended December 31, 20X1 and 20X0
Current Ratio = Current Assets / Current Liabilities
Current Ratio (20X1): 3.22
Current Ratio (20X0): 2.37
Acid Test = (Cash Equivalents + Marketable Invest + Account Receivable) / Current Liabilities
Acid Test (20X1): (9500+15000) / 8650 2.83
, Acid Test (20X0): (7500+13500) / 10250 2.04
Liquidity ratios measure a facility’s ability to maintain a cash position, collect
receivables, and done all while meeting a short‐term obligation (Zelman et al., 2020, p. 152).
When evaluating the financial performance of liquidity ratio, it is crucial because a higher value
means greater ability to pay obligations. The Longwood Community Hospital’s financial
performance shows that the organization had improvement in liquidity over the year. In year
20X1, the current ratio has increased by over 0.85 and the acid test percentage has increased
from the previous year by 0.79. This data shows that Longwood Community has demonstrated
adequate liquidity, hopefully leading to more success in the next year.
Activity Ratios: (in thousands) for the years ended December 31, 20X1 and 20X0
Total Asset Turnover Ratio = Total Operating Revenue / Total Assets
Total Asset Turnover Ratio (20X1) 0.97
Total Asset Turnover Ratio (20X0) 0.96
11:18:06 GMT -05:00
