EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Limited, each of which is a separate legal entity. Ernst & Young Limited is a Swiss company with registered seats in Switzerland providing services to clients in Switzerland.
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Despite a positive revenue trend at many hospitals, operating results are falling well short of targets in some cases. The hospitals included in an EY analysis achieved an average EBITDAR margin of 2.7%, which is well below the industry’s established benchmark of around 10%. The trend of recent years points to continued pressure on margins in the coming years. In addition, many hospitals will have to make much-needed investments in new buildings and renovations as well as in digitalization, which means that their focus is increasingly shifting to liquidity.
An analysis by EY of the liquidity ratios of 20 acute care hospitals in Switzerland reveals considerable variability in liquidity among hospitals. The quick ratio, i.e., the ratio of liquid assets and current receivables to current liabilities, was between 0.68 and 12.35 for the hospitals evaluated by EY, with a median of 2.40. A large number of hospitals, then, have a value that is significantly above the target of 1 to 1.20. However, almost a third of the hospitals surveyed have a quick ratio of under or just over 1.