Question

Compare and contrast 4 common financial measures used by two healthcare firms. (Hint: In the library, consult LexisNexis Academic to find financial information for the healthcare organizations you choose.) Be sure you explain the measure and how it is depicted by each company. With references...I am not understanding this question at all. Can someone please help

Answer 1

This question asked you to write and compare 4 common financial measure ie financial ratio which are used by health care organisation

for example

1. operating earning before interest depreciation and amortisation (EBITA): this represent organisation's profitability from daily operating activity except capital related decisions, interest and depreciation expenses.

2 operating margin: operating margin show organisation's profitability from operations including investment related decisions, interest and depreciation expenses.

3 Capital spending: capital spending analyse the organisation's leval of capital expenditure as percentage of annual depreciation expenses

4 days cash in hand: Days cash in hand is a liquidity measure, it represents the no of days an organisation could support its operating expenses without collecting additional cash