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Students are to have a discussion summarizing what they learned. To be sure you receive full credit for the discussion board, you need to post your initial response, then respond to a peer. This will ensure full credit for the discussion board providing your initial response, and your peer response are substantive. There is a 75–100-word requirement for your initial response Students are to have a discussion summarizing what they learned. To be sure you receive full credit for the discussion board, you need to post your initial response, then respond to a peer. This will ensure full credit for the discussion board providing your initial response, and your peer response are substantive. There is a 75–100-word requirement for your initial response.
How Many Ratios Are Enough?
In our discussion of financial statement ratio analysis, we discussed 14 ratios that are commonly used to help interpret financial statement data. Although that may seem like a lot of ratios, our discussion just scratched the surface. For example, one of the most widely used sets of comparative data for hospitals, the Almanac of Hospital Financial and Operating indicators, published annually by Optum360, provides data on more than 30 financial ratios.
Without too much additional work, you could probably compile a list of 50 financial ratios. Yet studies have shown that about 90 percent of the information contained in financial statement can be uncovered using 10 or so carefully selected ratios.
How many ratios do you think are enough? Does it matter how the ratios are selected? Is there a cost to using more ratios than necessary? What is the disadvantage of generating too much data?How Many Ratios Are Enough?
In our discussion of financial statement ratio analysis, we discussed 14 ratios that are commonly used to help interpret financial statement data. Although that may seem like a lot of ratios, our discussion just scratched the surface. For example, one of the most widely used sets of comparative data for hospitals, the Almanac of Hospital Financial and Operating indicators, published annually by Optum360, provides data on more than 30 financial ratios.
Without too much additional work, you could probably compile a list of 50 financial ratios. Yet studies have shown that about 90 percent of the information contained in financial statement can be uncovered using 10 or so carefully selected ratios.
Read:
Healthcare finance : an introduction to accounting & financial management / Louis C. Gapenski, Kristin L. Reiter
Chapter 03- textbook pages 75-117 and student slides
Chapter 04- textbook pages 119-156 and student slides
Chapter 17- textbook pages 639-678 and student slides
Additional Reading- Financial Analysis Ratios
Additional Reading- Operational Analysis Ratios
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