Financial Statements From Health Management Associates

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Introduction Hospitals, like any other business need profits for sustainability. With minimum knowledge of the logistic, one may easily assume hospitals are about patient care not profits. While patient care is paramount and the primary focus of the business, there are overhead cost, debts need to be paid, and employees need to be paid. While healthcare providers are providing excellent care to the patients, management is ensuring sufficient resources are incoming to maintain operation. The management team will use financial statements from Health Management Associates (HMA) to develop a financial plan for the next three years. The Financial analysts will use financial ratios to speculate HMA’s ability to meet financial obligations and assess profitability trends. The financial ratios are a valuable prediction gauging if HMA will be viable in five years. Financial Analysts Evaluation Financial ratios are calculation of numbers from the financial statements for a comparative analysis. A ratio in and of itself has little meaning but as a tool of comparison, internally, it reflects the company’s performance year to year, or externally comparing other organizations’ performance within the same industry. Ratios help to determine the company’s strengths, weakness, and risk. Credit analysis and investors also rely heavily on ratios (Baker & Baker, 2014). To evaluate the overall health of a company most financial analysts commonly use profitability ratios. Profitability
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