The financial position of Colby General Hospital C Financial Analysis can be assessed by having a look at its ratio analysis.
We can see in appendix 1 how the income has been decreasing throughout the years after 2005. The reality that the gross profit margin has actually reduced as well recommends that the cost of sales have actually not gone down at the very same rate. The declining internet profitability, showing an unfavorable pattern from 2006 to 2007 suggests that expenditures have actually increased even more than the company has the ability to manage provided its present resources. With a long term financial obligation contributing to the interest expenditure, Colby General Hospital C Financial Analysis is in dire requirement of an alternative profits stream.
We can see a major declining pattern in the present ratio too revealing a fall in liquidity which is another point of concern for Colby General Hospital C Financial Analysis specifically as it has a long term debt to settle as well. With the present possessions not in a position to pay off the existing liabilities, we can see how the business would be in a significant monetary problem unless the capital enhances with additional sources of financing.
We could explore the monetary condition of Colby General Hospital C Financial Analysis further by looking at the company's total financial obligation to total assets ratio in appendix 2. We can see how the total possessions of the business have actually been decreasing from 2005 onwards. However, the long term debt has actually stayed at $160 million while the short term debt has actually increased side by side. Such a circumstance has actually brought Colby General Hospital C Financial Analysis to a point where its overall financial obligation to total properties ratio has increased as well. A rising overall debt to total properties ratio recommends that the danger has actually increased in regards to the business's assets not being enough to cover its overall liabilities. This might not be showing the total liquidity position but provides clarity in terms of the overall financial position of the business.