The financial position of Colby General Hospital B Financial Analysis can be examined by taking a look at its ratio analysis.
We can see in appendix 1 how the earnings has actually been declining for many years after 2005. Nevertheless, the truth that the gross profit margin has decreased as well recommends that the cost of sales have not decreased at the exact same pace. The decreasing internet profitability, showing an unfavorable trend from 2006 to 2007 recommends that expenditures have increased far more than the business has the ability to manage given its existing resources. With a long term debt adding to the interest expenditure, Colby General Hospital B Financial Analysis is in dire requirement of an alternative profits stream.
We can see a significant declining trend in the present ratio too revealing a fall in liquidity which is another point of issue for Colby General Hospital B Financial Analysis particularly as it has a long term debt to settle too. With the current properties not in a position to pay off the present liabilities, we can see how the business would remain in a major financial trouble unless the cash flow improves with additional sources of finance.
We could explore the financial condition of Colby General Hospital B Financial Analysis further by looking at the business's overall debt to total properties ratio in appendix 2. We can see how the overall possessions of the business have actually been declining from 2005 onwards. However, the long term financial obligation has actually stayed at $160 million while the short term financial obligation has actually increased side by side. Such a situation has brought Colby General Hospital B Financial Analysis to a point where its total financial obligation to total assets ratio has increased also. A rising overall financial obligation to total possessions ratio recommends that the danger has actually increased in terms of the company's properties not sufficing to cover its overall liabilities. This may not be showing the general liquidity position however provides clarity in terms of the overall financial position of the company.