Healthcare Research
Table of Facility Rankings
Ranking of Acute Care facilities:
These ranking are an attempt to illustate the relative financial health of all acute care facilities in the State of Florida. Rankings are based on a series of eight ratios. This page explains the methodology used in arriving at these ranks.
Current Ratio (CURR)
CURR = [current assets / current liabilities]
This Ratio shows well the current assets can cover the current liabilities.
Long Term Debt to Equity (LTDE)
LTDE = [non-current liabilities / total equity]
This ratio is a measure of the reliance on debt financing as opposed to capital or equity financing.
Equity Financing (EF)
EF = [total equity / total assets]
Measures the proportion of total assets that have been financed with equity.
Operating Margin (OPMAR)
OPMAR = [operating profits / total net revenues from operations]
Defines the proportion of operating revenues that result in profits.
Times Interest Earned (TIE)
TIE = [(net income + interest expense) / interest expense]
Indicates the multiple by which current interest expense is being met from existing income.
Return on Assets (ROA)
ROA = [net income / total assets]
Indicates the amount of net profit earned per dollar of investment.
Cash Flow to Assets (CFTA)
CFTA = [(net income + depriciation and amortization) / total assets]
Defines the proportion of cash flow to total assets, both current and noncurrent.
Grand Margin (GRMAR)
GRMAR = [net income / total revenues]
Defined as excess of revenues over expenses divided by total revenues net of allowances and uncollectables.
For each year and hospital the eight ratios are calculated and rank ordered from 1 to n. Next, these individual ranks are summed (for each year and hospital). At this point the hospital with the lowest sum of ranks is awarded the rank of 1 for that year and the hospital with the largest sum of ranks is awarded the lowest rank (n) for that year. In this initial investigation all eight ratios were given equal weight. Further reseach may result in an unequal weighting scheme for these ratios, as well as allowing for the ability to alter the weighting process. Facilities must have atleast six of the eight ratios in order to be considered for an annual rank. Ratios and ranks are still available (where data permits), however, the final step of summing all ranks over the year is not undertaken for facilities with 3 or more missing ratios.
Please contact Lehr Eliason with questions and/or comments.
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