Question 1

Using the example balance sheet and statement of operations (Tables 2.2 and 2.3) provided in Chapter 2, calculate the three bond repayment ratios. Use your calculations to comment on the financial condition of Ridgeland Heights Medical Center.

Your response must be at least 200 words in length.

Question 2

Everything in the hospital needs to be replaced. What a statement that is to make, but it is true! Every piece of equipment, every piece of furniture, every mechanical system, the hospital roof, the heating and air conditioning system. Even the hospital building itself eventually needs to be replaced. Of course, not all of that can be done in one year’s budget. As a healthcare administrator, how will you determine how much money you can spend on capital replacements and upgrades in a particular year? Explain the three approaches to determining capital affordability.

Your response must be at least 200 words in length.

Question 3

Why is financial ratio analysis crucial for understanding the financial position of a healthcare organization? Select any three of the commonly used financial ratios, provide the formula, and briefly explain what it tells us about the status of the healthcare facility.

Your response must be at least 200 words in length.

Question 4

Explain the difference between fixed and variable costs for a healthcare organization. Provide and discuss at least one example of a fixed cost in health care and one example of a variable cost in health care.

Your response must be at least 200 words in length.