Deck 14: Ratio Analysis: How Do We Compare to Other Health Care Organizations

Question 1

Describe three different types of benchmarks used in ratios.

Answer 1

Ratios should compare an organization over time to itself, to industry competitors, and to the industry as a whole.

Question 2

Match the following types of ratios with their definitions.

-__ Common size

A) assess whether an organization is maintaining an adequate level of cash or near-cash assets.
B) assess how well an organization did financially.
C) compares numbers on the balance sheet to total assets and numbers on operating statement to revenues.
D) assess the organization's ability to meet its financial debt obligations (principal and interest).
E) assess how well an organization manages its activities.

Answer 2

compares numbers on the balance sheet to total assets and numbers on operating statement to revenues.

Question 3

Match the following types of ratios with their definitions.

-__ Liquidity

A) assess whether an organization is maintaining an adequate level of cash or near-cash assets.
B) assess how well an organization did financially.
C) compares numbers on the balance sheet to total assets and numbers on operating statement to revenues.
D) assess the organization's ability to meet its financial debt obligations (principal and interest).
E) assess how well an organization manages its activities.

Answer 3

assess whether an organization is maintaining an adequate level of cash or near-cash assets.

Question 4

Match the following types of ratios with their definitions.

-__ Efficiency

A) assess whether an organization is maintaining an adequate level of cash or near-cash assets.
B) assess how well an organization did financially.
C) compares numbers on the balance sheet to total assets and numbers on operating statement to revenues.
D) assess the organization's ability to meet its financial debt obligations (principal and interest).
E) assess how well an organization manages its activities.

Question 5

Match the following types of ratios with their definitions.

-__ Solvency

A) assess whether an organization is maintaining an adequate level of cash or near-cash assets.
B) assess how well an organization did financially.
C) compares numbers on the balance sheet to total assets and numbers on operating statement to revenues.
D) assess the organization's ability to meet its financial debt obligations (principal and interest).
E) assess how well an organization manages its activities.

Question 6

Match the following types of ratios with their definitions.

-__ Profitability

A) assess whether an organization is maintaining an adequate level of cash or near-cash assets.
B) assess how well an organization did financially.
C) compares numbers on the balance sheet to total assets and numbers on operating statement to revenues.
D) assess the organization's ability to meet its financial debt obligations (principal and interest).
E) assess how well an organization manages its activities.