Understanding Financial Reports Filing

Question 1

Liquidity Ratio

Answer 1

reflects the ability of the organization to meet its current obligations. It measures short-term sufficiency and the ability of the organization to have sufficient cash or assets that can be converted to cash on hand.

Question 2

Solvency Ratio

Answer 2

is the ability of the organization to pay the annual interest and principal obligations on its long-term debt. It measures the ability of the organization to have sufficient resources to meet its long-term obligations.

Question 3

Profitability Ratios

Answer 3

the ability of the organization to operate with an excess of operating revenue over operating expense.
- Operating Margin
- Return on Total Assets = earnings before interest and taxes (EBIT) / total assets.

Question 4

Current Ratio

Answer 4

current assets / by current liabilities

Question 5

Quick Ratio

Answer 5

cash + short-term investments + net receivables / current liabilities

Question 6

Days Receivables

Answer 6

receivables / net credit revenues / 365

Question 7

Days Cash on Hand (DCOH)

Answer 7

unrestricted cash and investments / cash operating expenses / 365

Question 8

Debt Service Coverage Ratio (DSCR)

Answer 8

change in unrestricted net assets (net income) + interest, depreciation, and amortization / maximum annual debt service

Question 9

Basic Financial Statements in Healthcare Organizations

Answer 9

1. Balance sheet
2. Statement of revenue and expense
3. Statement of fund balance or net worth
4. Statement of cash flows
5. Subsidiary Reports