HE420 Healthcare Finance and Accounting

Refer to the Metropolis Health System (MHS) case study in Chapter 25.

1.Set up a worksheet for the liquidity ratios.

The liquidity ratios are:

A)Current Ratio = Current Assets/Current Liabilities

B)Quick Ratio = Cash and cash equivalent + net receivables/Current Liabilities

C)Days Cash on Hand = Unrestricted cash and cash equivalent/Cash Operation Expenses/No. of Days in Period (365)

D)Days Receivables = Net Receivables/Net Credit Revenue/ No. of Days in Period (365)

2.Compute the four liquidity ratios using the Chapter 25 MHS financial statements