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Summary Assignment 3.docx Financial Ratios Analysis and Comparison MHA 612 Assignment 3 Ashford University Financial Ratios Analysis and Comparison Introduction In health care as in any other indudtry, it is very important to keep financial planning and s$4.99
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Summary Assignment 3.docx Financial Ratios Analysis and Comparison MHA 612 Assignment 3 Ashford University Financial Ratios Analysis and Comparison Introduction In health care as in any other indudtry, it is very important to keep financial planning and s
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Ashford University
Assignment Financial Ratios Analysis and Comparison MHA 612 Assignment 3 Ashford University Financial Ratios Analysis and Comparison Introduction In health care as in any other indudtry, it is very important to keep financial planning and strategies present. Financial statements are used a...
assignment 3docx financial ratios analysis and comparison mha 612 assignment 3 ashford university financial ratios analysis and comparison introduction in health care as in any other indudtry
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Financial Ratios Analysis and Comparison
MHA 612 Assignment 3
Ashford University
Financial Ratios Analysis and Comparison
Introduction
In health care as in any other indudtry, it is very important to keep financial planning and
strategies present. Financial statements are used as a way to see the current status of the business
perspective of the organization. Using financial ratios, the management team is able to obtain
data and analyze it form the financial statements. In the case of Lee Health, they strive for
financial strength in order to provide quality health care.
Roles Played by Financial Ratios
Financial ratios are the numerical relationship between two variable parameters. These
percentages provide the meaningful information in financial statements. This way, the financial
perfonmance of an organization is masured and monitored in order to determine its efficiency,
effectiveness, and success. Financial ratios give evidence in regards to the financial condition of
a company, which engourages decision making.
, 2
Roles Played in General
Financial health is a very important quality for a healthcare corporation to have as it
displays its potential to be a lon term competitive organization in the industry. Financial
statements and financial ratios are indicators of the overall bussines financial performance.
Financial ratios play a key role in standardizing information and formats used in companies year
after year. These ratios are then compared with historical and current values in order to
determined trends in a period of time and compared to the industry standards. With this in mind,
financial and strategic plans are develop taking into account the organization performance.
Moreover, these financial indicators ase used in the analysis organizations make to projet
their performance and operations in the future, providing valuable insights on what to expect
and/or where to improve. With the information they provide, insight is given on whether a
corporation would likely declare bankruptcy or any other financial problems.
Analysis Commonly Used Financial Ratios by Category
Analyzis using financial ratios usually consirers four different aspects of the
organization: liquidity profitability, leverage, and operations.
Liquidity refers to whether the organization has enoughcash or short-term assets to be
able to pay all the liabilities needed within a year. In order to determined this, current ratio is
used, which is the current or short-term assets divided by the current liabilities. In other words,
current ratio determines the company’s liquidity as shrot-term liabilities are due in the following
year. When an organiaton report a high current ratio is definitely more favorable than a low
current ratio because is a representation that the company will be able to make debt payments.
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