Patton-Fuller Ratio Computation

Patton-Fuller Ratio Computation

By:

Brittney Deer, Janet Spellman, Daronza Harris, Leandra Stroude

October 3, 2015

Professor: LaTrina Frazier

Eight Ratios

Ratio 1. Current ratio: Unaudited 5.41 Audited 5.37

Ratio 2. Quick Ratio: Unaudited 20.41 Audited 20.41

For my two ratios, I believe that the CEO’s report to the board was correct. 2009 has been a better year. There was not a significant change between the audited and unaudited numbers. Although 2009 appeared to be better Patton-Fuller still faces some uncertainty regarding reimbursement from payers. Since revenues are based on this reimbursement over the next five years, I would suggest stabilization of rates and to make a strong effort to establish a better payer mix in its patient population. I would also suggest controlling debt and change over to non-adjustable interest rates for a more predictable liability amount.

Ratio 3. Day’s cash on hand:

2009 Unaudited 20.10 Audited 20.14:1

2008 Unaudited 0.20 Audited 0.20:1

Ratio 4. Days Receivables:

2009 Unaudited 0.39 Audited 0.40:2

2008 Unaudited 0.22 Audited 0.22:1

For my two ratios, we believe the CEO audited and unaudited versus are very similar, the company presented a good job on keeping the numbers the same between the audited and unaudited documents. Patton- Fuller community hospitals in the next five years need to work on collecting day’s receivables to build a stronger accounts receivable department they are doing well but can work harder on collecting balances that are more outstanding. Days hands on cash in 2009 unaudited and audited versus were similar, 2008 were the same. Same for the 2008 Days receivables in 2008 were the same ration. It looks the community hospital has stayed at stand still in the 2 years it would not hurt in increasing patient revenue to have more cash on hands and be continue to build a strong hospital. In the next five years, I would recommend the hospital build up their patient’s revenue. For my...