CivMetrics analyzed the 990 filings of nonprofit hospitals in top U.S. cities. We’re posting some of our insights here. In this installment, we look at the financial efficiency of nonprofit hospitals in the 10 largest U.S. cities, using several different metrics including: working capital ratio; administrative expense ratio and fundraising expense ratio.
We calculated the total assets of each hospital (including unrestricted and temporarily restricted net assets) and divided that number by total expenses. The result is a working capital ratio, or how many years a hospital could sustain its level of spending before going bankrupt.
Next, we looked at administrative expense percentage, or the percent of total functional expenses spent on management/general.
Finally, we analyzed the fundraising expense ratio. What percentage of raised funds ultimately went toward fundraising expenses?