Healthcare Organization Ratio Analysis Essay
Pages: 4 (1285 words) · Bibliography Sources: 6 · File: .docx · Level: College Senior · Topic: Health · Written: November 30, 2018
SAMPLE EXCERPT . . .
This ratio is a metric for the organization’s efficiency in the management of its assets to produce profits during a financial period. Bearing in mind that the sole objective of the organization’s assets is to generate revenues and generate profits, ROA is beneficial to both management and investors to perceive how effectively the firm can transform its investment in assets into profits (Bragg, 2012).
The return on assets ratio of McKesson Corporation is computed as follows:
access
for only $8.97. Leverage or capital structure ratios are financial metrics that investigate the amount of capital in the company in terms of debt. These ratios assess the capability of a firm to meet its financial obligations. These ratios are significant bearing in mind that firms are dependent on a mixture of both debt and equity to facilitate the financing of their operations. In this regard, ascertaining the debt amount held by a firm is beneficial in assessing whether it has the ability to pay off its debt obligations when they become due. One of the key leverage ratios is the debt ratio. It is also referred to as the debt to equity ratio. A high debt to equity ratio largely specifies that a corporation has been forceful in financing its growth with debt. This can give rise to volatile earnings on account of the extra interest expense. If the firm's interest expense develops too high, it may increase the firm's probabilities of a default or bankruptcy (Lanz, 2012).
The debt to equity ratio of McKesson Corporation is computed as follows:
References
This ratio is a metric for the organization’s efficiency in the management of its assets to produce profits during a financial period. Bearing in mind that the sole objective of the organization’s assets is to generate revenues and generate profits, ROA is beneficial to both management and investors to perceive how effectively the firm can transform its investment in assets into profits (Bragg, 2012).
The return on assets ratio of McKesson Corporation is computed as follows:
Return on assets = Net income / Total assets
- 2017: 5,153 / 60,969 = 8.45%
- 2016: 2,310 / 56,523 = 4.09%
Leverage / Capital Structure Ratios
Get full
for only $8.97. Leverage or capital structure ratios are financial metrics that investigate the amount of capital in the company in terms of debt. These ratios assess the capability of a firm to meet its financial obligations. These ratios are significant bearing in mind that firms are dependent on a mixture of both debt and equity to facilitate the financing of their operations. In this regard, ascertaining the debt amount held by a firm is beneficial in assessing whether it has the ability to pay off its debt obligations when they become due. One of the key leverage ratios is the debt ratio. It is also referred to as the debt to equity ratio. A high debt to equity ratio largely specifies that a corporation has been forceful in financing its growth with debt. This can give rise to volatile earnings on account of the extra interest expense. If the firm's interest expense develops too high, it may increase the firm's probabilities of a default or bankruptcy (Lanz, 2012).
The debt to equity ratio of McKesson Corporation is computed as follows:
Essay on Healthcare Organization Ratio Analysis Assignment
Debt to equity ratio = Total debt / Total equity
- 2017: 49,696 / 11,273 = 4.41
- 2016: 47,515 / 9,008 = 5.27
Non-Financial Ratios
Non-financial ratios are quantitative measures of the performance of a firm that is not expressed in terms of monetary units. Non-financial performance measures can act as primary pointers of forthcoming financial performance and can offer discernment as to the firm’s effect on stakeholders and society. They can offer more extensive perceptions of the internal workings of the firm. In addition, the key benefit of these non-financial metrics is that they can be employed to comprehend the reason as to why particular financial outcomes took place and what the organization needs to change to improve the financial metrics (Rist and Pizicca, 2014). McKesson has information solutions in 65 percent of America’s largest hospitals and more than 50 percent of the nation’s health systems. It has a presence in more than 40 percent of the United States’ payor organizations, comprising more than 80 percent of the biggest HMOs, and approximately 20 percent of the nation’s home healthcare organizations.References
- Bragg, S. M. (2012). Business ratios and formulas: a comprehensive guide (Vol. 577). Hoboken: John Wiley & Sons.
- Ittelson, T. R. (2009). Financial statements: A step-by-step guide to understanding and creating financial reports. New Jersey: Red Wheel/Weiser.
- Lan, Z. J. (2012). 16 Financial Ratios for Analyzing a Company’s Strengths and Weaknesses. AAII Journal.
- McKesson Corporation. (2018).About Us: Our History. Retrieved from: https://www.mckesson.com/about-mckesson/our-history/
- Rist, M., & Pizzica, A. J. (2014). Financial ratios… [END OF PREVIEW] . . . READ MORE
Two Ordering Options:
?
1. Buy full paper (4 pages)

Download the perfectly formatted MS Word file!
- or -
2. Write a NEW paper for me!We'll follow your exact instructions!
Chat with the writer 24/7.
Health Care Financing Term Paper …
Implementation of Electronic Medical Records in Healthcare Case Study …
Healthcare Policy Issue and Nursing Strategies Essay …
Healthcare - Unions Implications of Unionization Term Paper …
Health Care Providers Case Study …
How to Cite "Healthcare Organization Ratio Analysis" Essay in a Bibliography:
APA Style
Healthcare Organization Ratio Analysis. (2018, November 30). Retrieved January 15, 2021, from https://www.essaytown.com/subjects/paper/ratio-analysis-healthcare/4142831MLA Format
"Healthcare Organization Ratio Analysis." 30 November 2018. Web. 15 January 2021. <https://www.essaytown.com/subjects/paper/ratio-analysis-healthcare/4142831>.Chicago Style
"Healthcare Organization Ratio Analysis." Essaytown.com. November 30, 2018. Accessed January 15, 2021.https://www.essaytown.com/subjects/paper/ratio-analysis-healthcare/4142831.