MHA 706 MODULE 3 QUESTIONS AND ANSWERS LATEST UPDATE

MHA 706 MODULE 3 QUESTIONS AND ANSWERS LATEST UPDATE Ratio Analysis - Answers technique used in financial condition analysis Financial ratio analysis - Answers combines values from the financial statements to create single numbers that facilitate comparisons Profitability ratio - Answers answers the question- is the business generating sufficient profits Liquidity ratio - Answers can the business meet its cash obligations or debts Debt management ratio - Answers answers whether the business is using the right mix of debt and equity Asset Management - Answers looks at whether the business has the right amount of assets for the patient volume that it has. Total margin - Answers net income /total revenue Operating margin - Answers operating income/operating revenue ROA - Answers net income/ total assets ROE - Answers net income/ total equity Return on assets - Answers for every dollar that we invested in assets, the hospital generated about $__ in net profit. Return on equity - Answers 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 - Answers the higher the number it's worse. So you want lower values. While in the times interest earned, higher are better. FA turnover - Answers total revenue (net operating + nonoperating)/ net fixed assests TA turnover - Answers total revenue (net operating + nonoperating)/ total assets Days in patient accounts receivable - Answers Net patient accounts receivable/(net patient service revenue/365) when we look at the fixed asset and total assets turnover, - Answers higher values are good when it comes to the days in patient accounts receivable, - Answers lower values are good Dupont analysis - Answers summarizes and highlights a business's financial condition total asset turnover - Answers is looking at asset utilization or efficiency. the equity multiplier - Answers is a measure of how much that the hospital organization is using Operating indicator analysis - Answers analysis involves the use of operating data (as opposed to financial statement data) to try to explain a business's financial condition Operating indicators can be grouped into categories such as: - Answers ◦Profit indicators