Relative Financial Norms And Standards Within The Hospital Industry

1366 WordsJun 5, 20166 Pages
Relative Financial Norms and Standards within the Hospital Industry Hospitals and health systems in the U.S. are experiencing a remarkable transformation in their business models directed from numerous influences that are projected to ultimately turn the industry around. Pressures include providers troubled with the quantity of services they are responsible for, to providers who concentrate on presenting high-cost services that give emphasis to sustaining healthy populations (Dunn & Becker, 2013). The hospital industry consist of privately and publicly owned and operated hospitals and medical facilities. The financial backgrounds of these assorted categories of organizations are sizeable and contrasted. Therefore, industry ratios are to be considered and evaluated from a greater proportion in order to identify with the financial data involving the industry as a whole (Dunn & Becker, 2013). Based on analysis and evaluation of the financial ratios gained from Nasdaq and Google Finance, it is apparent that the hospital industry is gradually rising and supports increase in profitability. These ratios are divided into several categories: Growth rates, financial strength, valuation, profitability, efficiency, dividends, and management effectiveness. The growth category is analyzed through the earnings per share (EPS) growth rate. The EPS five-year growth rate of the hospital industry is 10.93% ("Price earnings ratios," n.d.).This ratio is a widespread marker of industry

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