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An Empirical Analysis Of Cash Flow, Working Capital, And The Stability Of Financial Ratio Groups In The Hospital Industry, David Chun, Terrell Zollinger, Anne Kelly, Robert Sawyer

Anne Kelly

Hospitals are facing stringent financial constraints as well as proposed changes in their financial reporting. Three issues were explored: (a) whether hospital financial ratio groups differed from industrial firm financial ratio groups found in previous studies; (b) whether hospital financial ratio groups remained stable over a five-year period 1983–1987; and (c) whether there was a difference between working capital flow, cash flow, and net income plus depreciation as alternative hospital asset flow measures. The results of our study confirmed the existence of five hospital ratio groups that were identical to industrial ratio groups. A separate Cash Flow group emerged for …