| Course | HS440 Finance for Health Care |
|---|---|
| Unit | Unit 4 |
| Paper type | Ratio analysis |
| Length | About 600 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Health Science |
| Updated | October 2026 |
Free sample paper for HS440 Unit 4
Out-Working Its Peers, Collecting Less and Slower: A Unit 4 Ratio Analysis of a Composite Endoscopy Center
[Student Name]
Purdue University Global
HS440: Finance for Health Care
Unit 4 Ratio Analysis
[Instructor Name]
[Date]
The center, its figures and the peer medians are composite; the finance texts and the study of financial indicators cited are real.
The Eight Ratios
Each ratio is listed with its formula, the center's value, a composite peer median and a short verdict. Ratios are grouped by what they measure, as most finance texts arrange them: profitability, liquidity, revenue cycle and operations (Pink & Song, 2020).
1. Operating margin. Operating income divided by net revenue: minus 117,710 over 4,270,050, or minus 2.8 percent. Peer median: 8.0 percent. Verdict: well below.
2. Net revenue per case. Net revenue divided by cases: 4,270,050 over 5,820, or 734 dollars. Peer median: 790. Verdict: below, reflecting payer mix.
3. Days cash on hand. Cash over a day's worth of operating spending, leaving out depreciation because it uses no cash: 173,500 over 10,898, or 15.9 days. Peer median: 45 days. Verdict: far below.
4. Current ratio. Assets turning to cash within a year over debts due within a year: 850,000 over 257,600, or 3.30. Peer median: 2.0. Verdict: above, but misleading.
5. Days in accounts receivable. Unpaid patient bills over an average day's revenue: 612,000 over 11,699, or 52.3 days. Peer median: 38 days. Verdict: well above, meaning slower collection.
6. Cases per room-day. 5,820 over 500 room-days, or 11.64. Peer median: 10.5. Verdict: above.
7. Supply cost per case. 977,760 over 5,820, or 168 dollars. Peer median: 155. Verdict: somewhat above.
8. Salary cost per case. Staffing and administration of 1,470,000 over 5,820, or 253 dollars. Peer median: 270. Verdict: below.
Reading the Ratios Together
The operations ratios are good. The center runs more cases per room-day than its peers and spends less on salaries per case. Supplies run slightly high, which a review of kit contents could address.
The financial ratios are weak. The margin is negative because payment per case is low, which earlier units traced to payer mix. Cash is thin. And collections are slow: 52 days in receivables against a peer median of 38 means about 14 days of revenue, roughly 167,000 dollars, is tied up in unpaid bills that peers would already have collected.
The current ratio of 3.30 looks healthier than the peer median, but most of the center's current assets are slow receivables, not cash, so the ratio is high for the wrong reason.
Why Peer Comparison Matters
Compared only with its own prior year, the center's margin slipped from about 1.5 percent to minus 2.8, and receivables rose from about 42 days to 52. Those look like modest changes. Against peers, both are serious. Benchmarks give ratios meaning, and comparisons should use organizations of similar type and size, since a ratio's normal range differs by setting (Pink et al., 2006).
Limits
The peer medians are composite stand-ins for published benchmarks and would need a real source in practice. Ratios describe; they do not explain. Slow collection might come from slower payers, a coding backlog or denied claims, and the ratio alone cannot tell them apart. A sample of open accounts would be the next step. The center's parent hospital also funds it, which makes low cash less dangerous than it would be for a freestanding center (Cleverley & Cleverley, 2018).
Verdict
The center is efficient in its rooms and weak in its finances. The two problems to work on are payment per case and speed of collection. Volume is not the problem.
References
Cleverley, W. O., & Cleverley, J. O. (2018). Essentials of health care finance (8th ed.). Jones & Bartlett Learning.
Pink, G. H., Holmes, G. M., D'Alpe, C., Strunk, L. A., McGee, P., & Slifkin, R. T. (2006). Financial indicators for critical access hospitals. The Journal of Rural Health, 22(3), 229-236. https://doi.org/10.1111/j.1748-0361.2006.00037.x
Pink, G. H., & Song, P. H. (2020). Gapenski's healthcare finance: An introduction to accounting and financial management (7th ed.). Health Administration Press.
HS440 Unit 4 instructions, in plain terms
Unit 4 usually asks you to calculate a set of financial and operating ratios, set them beside peer figures and say what the comparison shows. Most analyses pair a table with a page or two of reading. Graders reward correct formulas and figures, a benchmark for each ratio, interpretation that reads ratios together rather than one by one, and a frank paragraph on what ratios cannot tell you. Many sections reward spotting a ratio that looks good for the wrong reason. Group ratios by what they measure. Cite a finance text for the formulas and a published study or survey on benchmarks for similar organizations.
How the HS 440 Unit 4 example is put together
The analysis groups eight ratios by profitability, liquidity, revenue cycle and operations, citing a finance text. Each ratio is given with its formula in words, the center's figure, a peer median and a one-word verdict. A section reads the ratios together: strong operations, weak margin, thin cash and slow collection, with the dollar value of the extra days in receivables. The highlighted sentence explains why the current ratio misleads. A section contrasts the prior-year view with the peer view and cites a study of financial indicators on choosing comparable benchmarks. Limits are named, including the need for a real benchmark source, and a short verdict identifies payment per case and collection speed as the problems.
HS440 Unit 4 rubric: what earns full points
Ratio analyses tend to be scored on accuracy, use of benchmarks, integrated interpretation and recognition of limits. Integrated interpretation usually earns the most, because the unit is about seeing how ratios explain each other, such as a high current ratio built on slow receivables. Accuracy covers formulas and arithmetic. Benchmark credit goes to a comparison for every ratio and a reason the comparison is fair. Limits earn points when the analysis says what ratios cannot explain and what to examine next. A clear verdict that names the specific problems, rather than calling performance weak, shows the analysis reached a conclusion. Stating where each benchmark came from, even when it is supplied by the course, adds credibility.
HS440 Unit 4 help: mistakes that cost points
The usual weakness is a table of ratios with a sentence each and no reading across them. Another is comparing only with the prior year, which can make a serious problem look minor. Some students treat a high current ratio as automatically healthy. Others compute days cash on hand without removing depreciation. Missing the dollar value of slow collection leaves the finding abstract. If your organization is different, perhaps a clinic or a nursing home, share its figures and the benchmarks your course provides, and the ratios can be read together the same way. A ratio reported to too many decimal places suggests more precision than the data allow.
Get an HS440 Unit 4 example written to your instructions
Pass along the statements or ratio inputs from your Unit 4 case and any benchmark set the course provides; the rubric helps too. If no benchmarks are supplied, composite medians are used and labeled as such. The analysis comes back within 24-48h, each ratio with its formula and a verdict, and the first sample requested is free. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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HS440 Unit 4 questions, answered
Where do benchmark figures come from?
Courses often supply them. Otherwise, industry surveys, rating agency medians and state cost report data offer comparisons for hospitals, and professional associations publish figures for outpatient centers. Medians in the sample are marked composite, since presenting invented figures as published ones would mislead. If you use real benchmarks, cite the source, year and peer group, because a median without a peer group cannot be judged.
Why is a high current ratio not automatically good?
Because it measures how far current assets exceed current liabilities, not what those assets are. Here most of them are receivables aging past peer norms, so the ratio rises partly because the center collects slowly. Cash on hand, the more liquid measure, sits at 15.9 days against a peer 45. Reading the two together gives the honest verdict.
How many ratios does the analysis need?
Whatever the prompt specifies; otherwise six to ten across productivity, revenue, cost and liquidity are usually enough for a department or small center. More ratios dilute the interpretation. The sample uses eight and spends its words on the three gaps that matter most: revenue per case, collection speed and cash.
Where can I find a free HS440 Unit 4 sample paper?
This page holds the complete Unit 4 ratio analysis, comparing a composite endoscopy center's eight ratios with peer medians.
What does days in accounts receivable measure?
How many days of revenue are sitting in unpaid bills, which shows how quickly the organization collects what it is owed.