An Empirical Analysis of Cash Flow, Working Capital, and the Stability of Financial Ratio Groups in the Hospital Industry

An Empirical Analysis of Cash Flow, Working Capital, and the Stability of Financial Ratio Groups in the Hospital Industry

by

David K. W. Chu, Terre11 W. Zollinger, Anne S . Kelly, and Robert M. Saywell, Jr.

The correct financial analysis, on many issues, has been the basis for understanding economic activity in the contemporary world, in the case of the health sector, their concepts have not been sufficient to explain an area that traditionally, it has not been seen and analyzed as attractive for private investment.

Providing health services, in classic form, has started from the belief that must and can be managed by the state sector may, unfortunately the results have not been planning both. Globally there is a crisis in the sector and the quality services are provided by the private sector with a serious problem that is targeting people who may access them. Hospital medical services are immersed in an ethical issue that prevents solve the balance of supply and demand through prices.

The demand for hospital medical services is growing at a higher rate at which public and private investment can attend. Public investment has limited funds. Private investment, the low rate of return. It takes more and better medical technology is more expensive, resulting in an increase in the prices of final services. As for the work, effort, dedication and commitment needed by each patient it is high but the level of remuneration for the care team is not the best.

The search for solutions to the problems of hospital health must be in-depth analysis of the sector as well as in the analysis of many of the different currents of economic thought, none of them alone has the answer, which makes this sector it is a challenge for professionals from different areas, and governments regardless of their political affiliation.

From the beginning the provision of health services, and hospital in particular, were born with a stigma: it is not business, and could not be since the initial conception was helping others and hospitals were linked to the gods, religions and support neediest. It was clear, in ancient times, the recovery of health was a favor from God through men sent by him for this task, therefore it could not charge for it, beneficiaries could only offer up something in return to profit received.

It is also curious to understand that even though health is one of the physiological needs of man must meet, for example is located at the base of the pyramid of Maslow, the interesting thing is that in the areas where other needs are located Large companies have grown consisting even within the largest companies in the Standard and Poors, but that list does not appear any hospital group. The health crisis, worldwide industry is evidenced by the lack of nursing staff, especially nurses, aides, despite unemployment that exists globally.

Planning financial resources for the hospital industry, begins with a new management model, it changes very significantly, since the budget is established based on production targets, quality standards and compliance costs and incentives negotiated agreements . Therefore, the challenge is to use and strengthen processing tools that ensure reliable and timely information for the analysis of production costs and their structure in terms of fixed and variable overhead costs and direct.

Knowing the details about the composition of financing of the hospital network in terms of its sources and uses, it is partial, since the accounting of the financial resources used in the production process, only processes information about budget expenditures national.

The Hospital Management Model, through the implementation and training of teams of Financial Management System and instrumentation and process automation, assumes the challenge of managing all sources of funding for hospital services, and especially, the contribution made by users and users recovery fee, donations from different sources, and revenue from the sale of some services from third parties, if any excess capacity.

The organization of the sources of financing of health