"Unlock Financial Success: Proven Debt-to-Equity Ratio Strategies for Hospitals and Providers" 2 of 7

For my talk at the 2024 HFMA Conference, I will reveal what my 20 years of experience, supported by research for my book (to be released in 2024) has to say about using technology to boost financial and operating baselines. The implications are clear for any healthcare institution that has struggled to use technology to drive higher/sustainable measurable value, but has ended up with mixed results.

Leading up to my talk, which I will share with my Contracted Operations audience later in June, I will focus on some key fundamentals of how directly you can drive firm value with Contracted Operations projects.

My talk, and later my books to outline how we can use technology to drive outsized results on year-over-year basis, as part of your operating and financial management model.

Enhancing the Debt-to-Equity (D/E) Ratio: Processes, Controls, and Activities

The Debt-to-Equity (D/E) ratio is a critical financial metric that measures the relative proportion of a company’s debt to its shareholders' equity. This ratio helps investors and analysts evaluate the financial leverage and stability of a company. Here’s a comprehensive list of processes, controls, and activities that align with improving the D/E ratio:

Understanding the Debt-to-Equity (D/E) Ratio

Definition: The D/E ratio compares a company’s total liabilities to its shareholders' equity, indicating the degree to which a company is financing its operations through debt versus wholly-owned funds.

Components:

1. Total Liabilities: All short-term and long-term debt obligations of the company.
2. Shareholders' Equity: The net assets owned by shareholders, calculated as total assets minus total liabilities.

Key Components of Debt and Equity Management

1. Debt Management
2. Equity Management

High-Value Procurement Projects for Improving the D/E Ratio

To improve the D/E ratio, procurement can play a significant role by optimizing costs, improving cash flow, and supporting strategic financial management. Here are the key projects:

High-Value Procurement Projects

1. Implement Cost Reduction Initiatives
2. Strategic Sourcing and Supplier Negotiations
3. Optimize Inventory Management
4. Extend Payment Terms with Suppliers
5. Supplier Performance Management
6. Implement Sustainable Procurement Practices

Focused Projects for Immediate Impact

1. Cost Reduction Initiatives
2. Strategic Sourcing and Supplier Negotiations
3. Inventory Optimization
4. Extend Payment Terms
5. Supplier Performance Management Program
6. Sustainable Procurement Initiatives

Summary Table: High-Value Procurement Projects