HCS385 V7 Financial Analysis Calculations Worksheet

Hcs385 V7financial Analysis Calculations Worksheethcs385 V7page 2 Of

Complete Parts 1, 2, and 3 using the provided prompts. Part 1 involves matching definitions A–J with the corresponding financial ratio questions in the table. Part 2 requires performing financial ratio calculations in Excel. Part 3 entails writing a 150- to 350-word summary evaluating the financial analysis, making recommendations regarding the purchase of Hillside, Inc., and supporting conclusions with ratios, citing sources as per APA standards.

Paper For Above instruction

Financial analysis is a crucial tool used by healthcare administrators to evaluate the financial health and operational efficiency of organizations. In this exercise, we first establish a connection between key financial concepts and their definitions, followed by calculating pertinent financial ratios, and finally synthesizing this data into a comprehensive summary to inform decision-making.

Part 1 of the assignment involves matching definitions with corresponding financial ratio questions. This exercise helps clarify understanding of core financial metrics. Definition A, "Indicates the desired level of performance an organization wants to compare itself with," pertains to benchmarking, which sets standards based on organizational goals or industry standards. B, "Acid test ratio," measures immediate liquidity, assessing whether a firm can meet its short-term obligations without selling inventory. C, "Ratio analysis," involves evaluating financial ratios to interpret a company's performance. D, "Types of financial ratios," refers to categories like liquidity, profitability, activity, and capital structure ratios. E, "An expression of the relationship between two numbers as a single number," describes a ratio itself. F, "Operating margin," indicates profitability by calculating operating income relative to sales. G, "Current assets divided by current liabilities," defines the current ratio, a liquidity measure. H, "Days in accounts receivable," calculates the average time to collect receivables, an activity ratio. I, "Measures how organization's assets are financed and how able the organization is to pay for new debt," references capital structure ratios. J, "Measures how productive the fixed assets of the business are in generating operating revenues," pertains to fixed asset turnover ratio.

Part 2 involves calculating the selected financial ratios using Excel. Key ratios like the current ratio, acid-test ratio, operating margin, and fixed asset turnover provide quantitative insights into financial stability, liquidity, profitability, and efficiency. These calculations utilize financial statement data such as current assets, current liabilities, net income, sales, and fixed assets, permitting an in-depth assessment of Hillside, Inc.'s financial status.

In Part 3, drafting the financial performance summary requires integrating the ratio analysis results. A balanced view should address whether Hillside, Inc. exhibits positive or negative financial outlook based on ratios like liquidity (current and acid-test), profitability (operating margin), and efficiency (fixed asset turnover). If ratios suggest robust liquidity and profitability, the outlook could be positive, indicating a sound investment. Conversely, weak ratios might imply financial instability or insufficient operational efficiency. Recommendations should be grounded in these findings. If the ratios reflect a strong financial position, it would support proceeding with the acquisition to enhance supply chain capabilities. However, if financial metrics reveal vulnerabilities, a cautious approach or further investigation is advised.

This financial assessment underscores the importance of ratio analysis in strategic decision-making within healthcare management. Accurate interpretation ensures sound investments and sustainable growth. All assertions and conclusions should cite credible sources, such as industry reports or financial textbooks, formatted according to APA guidelines.

References

• Brigham, E. F., & Ehrhardt, M. C. (2016). Financial Management: Theory & Practice. Cengage Learning.
• Gibson, C. H. (2017). Financial Reporting & Analysis. Cengage Learning.
• Higgins, R. C. (2012).Analysis for Financial Management. McGraw-Hill Education.
• Ross, S. A., Westerfield, R. W., & Jaffe, J. (2016). Corporate Finance. McGraw-Hill Education.
• Wild, J. J., Subramanyam, K. R., & Halsey, R. F. (2014). Financial Statement Analysis. McGraw-Hill Education.
• Zeighami, A., & Rezaei, A. (2018). Financial Ratios and Corporate Performance: Evidence from Healthcare Sector. Journal of Financial Analysis & Management, 21(2), 95-112.
• American Hospital Association. (2021). Hospital Financial Pulse. AHA Publishing.
• Healthcare Financial Management Association. (2020). HFMA Annual Survey of Hospital Financial Trends.
• Smith, P., & Smith, J. (2019). Strategic Financial Management in Healthcare. Elsevier.
• Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2019). Financial Accounting. Wiley.