Specialized ratio analysis

Many common management techniques have little use in managing a medical group practice. Ratio analysis, however, can easily be adapted to the group practice setting. Acting as broad-gauge indicators, financial ratios provide an early warning of potential problems and can be very useful in planning for future operations. The author has gathered a collection of financial ratios which were developed by participants at an education seminar presented for the Virginia Medical Group Management Association. Classified according to the human element, system component, and financial factor, the ratios provide a good sampling of measurements relevant to medical group practices and can serve as an example for custom-tailoring a ratio analysis system for your medical group.