Healthcare Finance And Ratio Analysis

As an organization that offers our members goods and services, we are all responsible for managing the financial health of our organization. Healthcare Finance is the “accounting and financial management principles and practices used within health services organization to ensure the financial well-being of the enterprise” (Gapenski & Reiter, 2016). Due to our heavy workload, we can’t keep track of everything however there are somethings that we can focus on such as balance sheets, financial benchmarking, trend and ratio analysis, EBITDA and EBITDAM. Lastly, we must make sure that no matter what we do, it is done in decency and in order in accordance to the company’s ethics policy regarding finance. A type of financial statement that is often

Financial benchmarking is the process of “running a financial analysis [report] and making a comparison of the results [to] assess a company’s overall competitiveness, efficiency and productivity” (Debitoor, 2018). These analyses are often altered between ratio and financial trend. Ratio analysis or also known as financial ratio analysis “is a quantitative analysis of information contained in a company’s financial statements [and it] is used to evaluate various aspects of a company operating and financial performance such as its efficiency, liquidity, profitability and solvency” (Momoh, 2017). Financial trend analysis “[are] often used to make projections and assessments of [an organization] financial health … Analysts [typically]examine the past performance of their company, along with current financial conditions, to determine how their company will perform in the future” (Lewis, 2011). In his 2004 article entitled “Financial Benchmarking and Ratio Analysis in the Healthcare Industry”, Robert James Cimasi, breaks down financial benchmarking into two parts and explains how the three categories of benchmarking help predict future financial performance

In the peer reviewed article entitled, “Ethics and Financial: Overview of the U.S. Healthcare System” by McManus and Pohl, they briefly explain the “impact of ethical issues in and on health care financing decisions over the past four decades … and [they] explore potential solutions and policies that would support more effective health care financing (1994). Financial ethics isn’t just one thing, it is a combination of standards that were created from the Financial Accounting Standards Board to assist financial professionals on how they act or how they regulate their business. Therefore, it is important for the professionals and business owners in the healthcare industry to understand why it is important to have a balance sheet, why its important to understand shareholder’s equity, why EBITDA & EBITDAMI is imperative. Knowing and understanding these terms, will allow us to study and focus on benchmarking and ration analyses so we can study the trends and possibly consider what the future holds for the financial market regarding