2011
2010
Benchmark
Favorable (F), Unfavorable (U), or Approximate (A)?
2011/2010
1. Current ratio
3.52
2.59
2.00
F
2. Days cash on hand
27.69
18.10
15.00
F
3. Days in A/R
69.31
76.58
45.00
F
4. Operating margin
2.1%
3.0%
4%
U
5. Return on total assets
5.0%
7.1%
4%
F
6. Return on net assets
5.63%
8.2%
10%
U
7. Debt to capitalization
61.2%
53.6%
50%
U
8. Times interest earned
2.47
3.36
4.00
U
9. Debt service coverage
.00195
.00174
2.00
U
10. Fixed asset turnover
3.27
2.88
3.00
U
11. Salary and benefit/NPSR
84%
82%
55%
U
Part 2:
Looking at the calculations above it shows favorable and would be considered a strength for the company amongst the common liquidity (current ratio, days cash on hand, and days in A/R) ratios. This means that if the company needed to liquidate they would be able to pay their liabilities and have some revenue left over in order to stay afloat. As far as profitability margins for the company the operating margin is rather low which could mean high inpatient cost, low inpatient reimbursement, or all of the above. This would be considered a weakness for the company. The return on total assets which measures profitability made the mark but return on net assets was lower than 10% meaning the company must have more liability (which includes fixed assets such as equipment and real estate) than profitability. As far as the capital structure ratios the debt to capitalization being higher than
