Key Data Consideration for Arcadia Hospital

Key Data Consideration for Arcadia Hospital - Hospital...

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Click to edit Master subtitle style  8/1/11 Key Data Consideration for Arcadia  Hospital By: William Edwards
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 8/1/11 Click icon to add  picture Ratio Analysis  between 2006 and  Current Ration = Current  Assets/Current Liabilities 2006: 1.81 2005: 2.16 What does this mean?
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 8/1/11 Ratio  Analysis Inventory Turnover =  Sales/Inventory =  Net Patient  Revenues/Inventory What does this mean? In 2006 Arcadia was able to  move its inventory faster. 
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 8/1/11 Ratio Analysis (continued) Since hospitals are a service based business, most of the net  patients revenues are from services received, and not inventory  that is sold. This means that the inventory turnover isn’t very  meaningful because the portion of net patient revenues accrued  from inventory sales can’t be broken off from the total net patient  revenues.
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What can be determined from  From 2005 to 2006, Arcadia Hospital decreased their liquidity;  which was shown by the decrease in their current ratios.  Arcadia showed that they could more effectively sell inventory,  and if is true , is a very positive indicatory. Since Arcadia is service based the inventory ratio is more than 
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Key Data Consideration for Arcadia Hospital - Hospital...

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