Patton Fuller Ratio Essay

811 WordsMar 4, 20134 Pages
Patton-Fuller Ratio Computation Shourn Henderson, Marilyn Lilly, Noralva Rodriguez HCS/405 February 11, 2013 Dr. Ben Kukoyi Patton-Fuller Ratio Computation Introduction This paper will address the ratio computations to Patton-Fuller Community Hospital taken from Audited and Unaudited Reports from 2008-2009. From 2008-2009 the existing assets reduced, but showed a growth in the hospital’s responsibilities. The hospital is presently making adequate revenue to cover the debts, which equals to no profit. Revenue needs to rise to avoid the debts of the hospital from increasing. Providing excellence service will in turn increase the quantity of patients seen eventually increasing revenue. The Current Ratio…show more content…
1.Return on Total Assets increase did what?, due to the improvement in Operating Income and the relatively small increase in Total Assets. Based on the audited financial statements, the eight ratios show that: 1.The Current Ratio decrease “unaudited” statements, due to the decrease in current assets as well as an increase in liabilities, which indicates an increase change in the ratio of assets to liabilities. 1.The Quick Ratio decrease, due to an audit adjustment to Net Accounts Receivable. This ratio indicates a decrease in the ratio of assets to liabilities. 1.The Days Cash on Hand increase “unaudited” statements, due to expenditure of cash and the increase Accounts Receivable. 1.The Days Receivables increase, again effectively removing millions in cash from the facility and leaving it in the hands of the payers. Due to the accounting method used at the hospital (Provision for Doubtful Accounts is shown as an “expense” and does not directly reduce “Net Patient Revenue”), the effect of the $4,224 audit adjustment was not as apparent in this ratio. 1.The Debt Service Coverage Ratio decrease unaudited statement, due to the audit adjustment of $1,000 Again, the “non-cash” expenses (depreciation, amortization) are big factors in the computation of this ratio. 1.The Liabilities to Equity Ratio (ratio of what is “owed” to what is “owned” showed the same unfavorable change, due 1.The
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