| Course | HC 306 Healthcare Finance |
|---|---|
| Unit | Unit 8 |
| Paper type | Finance summary report |
| Length | About 920 words, 6 pages |
| Format | APA 7 student paper |
| School | Herzing University |
| Program | BS in Healthcare Administration |
| Updated | October 2026 |
Free sample paper for HC 306 Unit 8
Four Ratios for NCH Healthcare System, Fiscal 2024: Liquid, Collecting Faster, Borrowing More, Still Losing Money on Operations
Student Name
Health Care Administration, Herzing University
HC 306: Healthcare Finance
Instructor Name
March 5, 2026
Four Ratios for NCH Healthcare System, Fiscal 2024: Liquid, Collecting Faster, Borrowing More, Still Losing Money on Operations
Organization, Period and Source
Organization: NCH Healthcare System, the Naples, Florida, not-for-profit whose two hospitals hold 713 beds. Period: fiscal year ended September 30, 2024, compared with fiscal 2023. Source: the system's audited consolidated balance sheets and statements of operations (NCH Healthcare System, 2025). Comparison: MultiCare Health System, a larger not-for-profit system in Washington state, for its fiscal year ended December 31, 2024, taken from its own audited statements (MultiCare Health System, 2025). A peer system's figures are used rather than a published industry median so that every comparison number can be checked against a source document. Dollar figures below are in millions unless stated.
The Four Ratios
Each ratio is shown with its formula, the numbers put into it and the result.
| Ratio | Formula | NCH 2024 | NCH 2023 | MultiCare 2024 |
|---|---|---|---|---|
| Current ratio (liquidity) | Current assets ÷ current liabilities | $283.4 ÷ $180.0 = 1.57 | $237.4 ÷ $147.6 = 1.61 | $1,826.0 ÷ $1,204.7 = 1.52 |
| Operating margin | Operating income ÷ total operating revenue | −$51.8 ÷ $908.5 = −5.7% | −$74.9 ÷ $818.5 = −9.2% | −$116.5 ÷ $5,859.2 = −2.0% |
| Debt ratio | Total liabilities ÷ total assets | $569.5 ÷ $1,416.9 = 40.2% | $322.5 ÷ $1,070.1 = 30.1% | $4,051.3 ÷ $8,210.3 = 49.3% |
| Days in patient accounts receivable | Patient receivables ÷ (patient service revenue ÷ 365) | $104.9 ÷ $2.42 per day = 43.4 days | $104.8 ÷ $2.15 per day = 48.9 days | $823.8 ÷ $15.06 per day = 54.7 days |
What Each Ratio Says
Liquidity. NCH's current assets cover its current liabilities about 1.6 times, a little lower than a year earlier because accounts payable and accrued expenses grew faster than current assets. The position is similar to MultiCare's. It suggests no difficulty paying near-term obligations, and it understates NCH's true liquidity, since $249.5 million of board-designated funds sit outside current assets.
Operating margin. NCH lost 5.7 cents on each dollar of operating revenue, better than the 9.2 cents lost in 2023 but worse than MultiCare's 2.0 cents. Revenue grew 12.7% and expenses 7.5%, so the trend is favorable, but the core business still does not cover its costs. The bottom line was positive only because of $67.0 million of investment income, which depends on markets.
Debt ratio. The share of assets financed by liabilities rose from 30.1% to 40.2%, driven by $213.7 million of new bonds issued during the year to fund construction. NCH remains less reliant on borrowing than MultiCare at 49.3%, but the increase is large for a single year, and the interest and principal on the new bonds will begin to appear in expenses.
Days in accounts receivable. NCH collected its patient revenue in about 43 days, faster than the 49 days of the prior year and well faster than MultiCare's 55. Revenue grew while receivables stayed flat, which indicates better billing and collection performance. A different definition would change the figure: the balance sheet also shows $69.6 million of estimated receivables from third-party payers, which this calculation excludes because it relates to settlements rather than patient billing. The same definition is used for both years and both systems, so the comparison holds.
Two Ratios Considered and Left Out
Two other ratios were calculated and deliberately kept out of the table, because the report is meant to be read in a few minutes and four ratios answer the four questions leadership asked. They are recorded here so a reader knows they were checked.
Days cash on hand, a second liquidity measure favored by bond analysts, divides cash and unrestricted investments by daily operating expenses excluding depreciation. For NCH: cash $32.4 million, current and noncurrent investments $15.4 million, and board-designated assets $249.5 million, a total of $297.4 million, divided by ($960.3 million − $52.3 million) ÷ 365, or $2.49 million a day, gives about 120 days. MultiCare's equivalent, using its cash and investments, is about 183 days. The measure confirms the current ratio's message that NCH can meet near-term obligations, while showing that its reserves are thinner than the larger system's.
Long-term debt to capitalization, a second borrowing measure, compares long-term borrowing with the sum of that borrowing and unrestricted net assets, showing how much of the permanent capital is borrowed. For NCH it rose from 17.6% to 34.4%, a steeper rise than the debt ratio shows, because the new bonds are long-term debt while the debt ratio also counts current liabilities and other obligations. Both borrowing measures point the same way, and both would draw a rating analyst's attention. Either could replace its partner in the table without changing the conclusions, which is the test for leaving it out.
Conclusion for Leadership
NCH is liquid and collecting faster, but it is borrowing more to build while still losing money on operations. The combination is manageable while investment income and reserves are strong. It becomes a concern if operating losses persist after the new facilities open and debt service begins in full. The two ratios to watch in the fiscal 2025 statements are the operating margin, which needs to keep improving toward break-even, and the debt ratio, which should stop rising once the bond proceeds are spent. This report follows the ratio definitions in the course text (Pink & Song, 2020); a reader using different definitions, such as including all receivables, would get somewhat different figures, which is why the formulas are shown beside every result.
Limits of the Comparison
A single peer is a thin benchmark. MultiCare is about six times NCH's size, operates in a different state with a different payer mix and labor market, and reports on a calendar year rather than a year ending in September, so the two sets of figures cover periods nine months apart. Its operating results also include items classified differently, such as other operating revenue from affiliated organizations. The comparison is useful for direction, whether NCH carries more or less debt, or collects faster or slower than another not-for-profit system, rather than as a target. A fuller benchmark would use several systems of similar size and payer mix, or a published median for not-for-profit hospitals of comparable scale, if one with a verifiable source is available.
References
MultiCare Health System. (2025). Consolidated financial statements: December 31, 2024 and 2023. https://www.oregon.gov/oha/HPA/HP/HCMOPageDocs/066%20Exhibit%2010.e.%20-%20PUBLIC%20Multicare%20Financial%20Statements.pdf
NCH Healthcare System, Inc. (2025). Consolidated financial report: September 30, 2024 [Audited consolidated financial statements]. https://nchmd.org/wp-content/uploads/2025/02/2023-and-2024-Financial-Statements-of-NCH-Healthcare-System.pdf
Pink, G. H., & Song, P. H. (2020). Gapenski's fundamentals of healthcare finance (3rd ed.). Health Administration Press.
Reading the HC 306 Unit 8 instructions
Unit 8 asks you to write a finance summary report for leadership using ratios from audited statements. Expect to state the organization, period and source, present ratios with formulas and inputs, explain each, note ratios considered and left out, conclude for leadership and state the limits of your comparison. Students often ask how many ratios to include. Choose a few that answer the questions leaders asked, such as liquidity, profitability, debt and collections. Show the formula and the numbers put into it, so anyone can check. Compare with the prior year and a peer or benchmark with a source. Say why a ratio was left out. Keep the conclusion short and specific.
How this HC 306 Unit 8 example is built
The report opens with the system, the fiscal year and why MultiCare was chosen as a peer. A ratio table gives formula, inputs and results across three columns. The explanation section takes each ratio in turn: liquidity similar to the peer and understated by board-designated funds, an operating margin improving but negative, a debt ratio rising with new bonds and faster collections. The left-out section records days cash on hand and another ratio with their results and reasons for exclusion. The conclusion says the combination is manageable while reserves are strong and names operating margin and debt ratio as the figures to watch. The limits section notes the peer's size, state and different fiscal year.
Reading the HC 306 Unit 8 rubric
Herzing's rubric for a finance summary report typically covers the source, the ratio table, interpretation, choices about what to include, the conclusion and limits. Ratios shown with formulas and inputs so they can be checked carry the most weight, since leaders and graders need to trust the numbers before the conclusions. Source points reward audited statements and a defined period. Table criteria look for prior year and peer comparisons. Interpretation credit goes to plain explanations tied to the organization. Inclusion points reward reasons for ratios left out. The conclusion should be brief and actionable. Limits should address peer differences. NCH's and MultiCare's audited statements and Gapenski's healthcare finance text support the report.
Common HC 306 Unit 8 mistakes, and how to avoid them
Finance summaries in HC 306 Unit 8 tend to falter when ratios appear without formulas or inputs. Another frequent problem is too many ratios for a leadership audience. Students often compare with a benchmark that has no source. Prior year figures are missing, so trends are unclear. Interpretation repeats the number in words. The conclusion is long and vague. Peer differences in size, state and fiscal year are ignored. Ratio definitions are not stated, though they vary between textbooks. Finally, show your inputs, because graders reward a report a board member could recalculate from the published statements in a few minutes.
Get a HC 306 Unit 8 example written to your instructions
Send the Unit 8 instructions and the rubric from your HC 306 classroom, plus the organization and any ratios your section requires. We write a custom example with the formulas shown, the inputs visible, each result compared against a prior period and two figures named for watching, back in 24 to 48 hours. The first custom sample is free.
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HC 306 Unit 8 questions, answered
Which ratios should the report carry?
Use the set your instructions specify. Left open, four areas cover it: the ability to pay bills soon, the margin left after operating, the share of the organization funded by debt, and how long billed work waits before it turns into cash. That set answers a manager's questions. Adding a fifth similar liquidity measure adds arithmetic without adding a finding.
What do I compare the results against?
The same organization a year earlier is the strongest comparison, because it holds everything else roughly constant. Published sector benchmarks work as a second reference point provided you name the source and the year. Where neither is available, compare against a similar organization and say plainly why the two are comparable, since an unexplained benchmark invites the obvious question.
How long should a summary report run?
Whatever your instructions allow, and inside that, shorter than feels comfortable. A manager reading about performance wants the finding, the arithmetic that supports it and the thing to watch, which fits in very little space. Everything you cut from the background makes room for the comparison work, and comparison is where the marks in this unit actually sit.
Where can I find a free HC 306 Unit 8 sample paper?
Read the complete HC 306 Unit 8 finance summary report here at no charge, four ratios for NCH Healthcare System with formulas, a peer and a conclusion for leadership. Ask for a custom report on another organization.
What financial ratios matter most for a hospital?
Common choices are the current ratio for liquidity, operating margin for profitability, the debt ratio and days in accounts receivable for collections. This sample calculates each for a Florida system.