Fatimah Al-baki

HMGT 3311.001
October 18, 2015
Fall 2015
Parkland Hospital

Company Profile
Parkland Memorial Hospital is located in Dallas, Texas and has served as Dallas Countys
public hospital since 1984. Parkland is one of the leading and fastest-growing public hospital
systems in the U.S. Their overall mission is to provide quality health care to all patients residing
in Dallas County. Parkland is additionally well known for their Civilian Burn Center, Level I
Trauma Center, and Level III Neonatal Intensive Care Unit. Aside from these major units, the
hospital also includes twelve school-based clinics, twenty community-based clinics, and various
teaching programs. The hospital is currently certified for 107 neonatal patient beds and 861 adult
patient beds. With their 10,000+ workers, Parkland averages more than one million patient visits
annually. In regards to demographics, Parkland treats over 85% minority patients (Hispanics,
African Americans, Etc.). Lastly, on top of patient visits, Parkland also serves as a teaching
facility for the University of Texas Southwestern Medical Center.
Industry Profile
Parkland Hospital has upheld its position as a leader in the health care industry and
remains one of the busiest public hospitals in the county. It currently employs more than 10,000
individuals in Dallas County and has the second largest civilian burn unit in the nation. In the
latest fiscal report, Parkland delivered $751 million in uncompensated care; however only 1/3 of
their total revenue came from property taxes. Recently, Parkland Hospital invested in a $1.3
billion healthcare facility, which replaced the original Parkland Hospital that was built in 1954.
This facility is known as the New Parkland. The new Parkland is twice the size of the initial
hospital and includes: 862 single-patient rooms, 17 floors, 2 helipads, 154 ER treatment rooms,
27 operating rooms, and 14 labor and delivery rooms. Through this expansion, the New Parkland
will be able to serve more patients than before. Finally, Parkland Hospital has been recognized for
its overall spend management, ability to adopt the best solutions in supply chain processes, and

Fatimah Al-baki
HMGT 3311.001
October 18, 2015
Fall 2015
referred as the most wired hospital by organizations, ERCI Institute and American Hospital
Associations Hospital & Health Network. Additionally, Parkland is one of only four qualified
labs in Texas and has received full recognition from the American Board of Registration of
Electroencephalographic.

Ratio Analysis (for Parkland Health & Hospital System only)

1) Current Ratio (Hospital System individually) (2014) = (371,661/ 281,131) = 1.32
Current Ratio (2013) = (334,967/ 221,522) = 1.51
2) Average Payment Period (2014) = 281,131/ [(1,302,359- 53,640]/ 365] = 82
Average Payment Period (2013) = 221,522/ [(1,218,585- 58,953)/ 365] = 70
3) Total Asset Turnover Ratio (2014) = (823,683/ 2,172,750) = 0.38
Total Asset Turnover Ratio (2013) = (767,070/ 2,069,257) = 0.37

4) Net Assets to Total Assets Ratio (2014) = (1,135,670/ 2,172,750) = 0.52

Net Assets to Total Assets Ratio (2013) = (1,134,251/ 2,069,257) = 0.55

Net Assets to Total Assets Ratio

2013

2014
0.5 0.55 0.6

5) Debt Ratio (%) (2014) = (1,037,080/ 2,172,750) = 47.7

Debt Ratio (%)(2013) = (935,006/ 2,069,257) = 45.2

Fatimah Al-baki
HMGT 3311.001
October 18, 2015
Fall 2015
48
46

2013

44

2014

42
Debt Ratio (%)

6) Long Term Debt to Net Assets Ratio (2014) = (743,402 /1,135,670) = 0.65
Long Term Debt to Net Assets Ratio (2013) = (699,042 / 1,134,251) =0.59
0.7
0.6
0.5
0.8 1 1.2 1.4 1.6 1.8 2

2013
2014

Long Term Debt to Net Assets Ratio

7) Days in AR (2014) = (84405)/(561343/365) = 55

Days in AR (2013) = (89530)/(520019/365) =62
0.8
0.6
2013
0.4
2014

0.2
0
Quick Ratio

8) Quick Ratio (TOTAL) (2014) = (98331+87481+84405)/353714 = 0.76

Quick Ratio (TOTAL) (2013) = (58205+38999+89530)/316612 = 0.59

Fatimah Al-baki
HMGT 3311.001
October 18, 2015
Fall 2015
2
1.5
1
2013
0.5

2014

Industry Average

0
Current Ratio

During fiscal years 2014 and 2013, Parkland

made a major investment on creating the New Parkland hospital and replacing old
medical equipment. The current ratio for Parkland Hospital decreased from 1.51 in 2013
to 1.32 in 2014 and is below the industry ratio of 1.9. The current ratio is most likely low
due to the 1.3 billion project investment in the creation of the New Parkland hospital. The
industry average for average payment period is around 64 days, while Parkland has an
average payment of 82 days. This shows that Parkland is taking longer to pay off their
creditors. The debt ratio increased from 2013 to 2014, which shows that the amount of
debt Parkland owes increased. Net patient services revenue increased by 8% and most
likely due to an increase in volumes as well as increases in charges. Days in AR
decreased which means that insurance companies (Medicare) or patients are paying the
hospital on time. The quick ratio and current ratio are not consistent because the current
ratio was based off of the hospital data on its own and the quick ratio was based off of the
Total ratio of all subsidiaries. However, the current ratio for the hospital data is consistent
with the quick ratio.
Overall Recommendation:
1. In order for Parkland Hospital to improve on their return on asset ratio, they could
increase operating revenues, decrease expenses, or decrease total assets.
2. In order to improve Parklands Current Ratio rate, they should start paying off their
liabilities. Their liabilities most like likely increased due to the expansion of the hospital.

Fatimah Al-baki
HMGT 3311.001
October 18, 2015
Fall 2015
3. Parkland Hospitals average payment period increased from 2013 to 2014. Parkland
should focus on decreasing the payment days by utilizing the discounts offered by
suppliers.
Resources
http://www.parklandhospital.com/phhs/general-information.aspx
http://www.parklandhospital.com/Uploads/Public/Documents/Dallas%20County
%20Hospital%20District%20Financial%20Report%20FY%202014.pdf
http://www.beckershospitalreview.com/lists/200-hospital-benchmarks.html