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Why is it necessary to rate the financial health of a hospital?

Why is it necessary to rate the financial health of a hospital?

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A hospital's financial performance is often the most important factor a buyer considers when evaluating and determining a bid for an acquisition. A hospital's overall financial health can be determined by examining its balance sheet — which includes the hospital's assets and liabilities — and its income and cash flow statements. To get a quick, holistic view of a hospital's overall debt leverage in conjunction with its operating performance and margin, buyers often examine the rating given for the financial health of that hospital. A hospital may show a profit, but if it has tremendous capital needs, it may not have the cash flow. To avoid these kind of situations it is necessary to rate the financial health of a hospital.

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