Ziegler and Baker Tilly offered an informative webinar on the results of the just-released, 30th anniversary edition of CARF’s annual Financial Trends report. Of all the unique attributes of organizations that make benchmarking challenging, contract type variety was identified as the biggest driver of differences. Key trends from the report included profitability, liquidity, and capital structure ratios. Generally speaking, profitability ratios continued to show a ‘slight weakening in core operations,’ while liquidity measures improved for both single- and multi-site organizations. Capital structure ratios showed strong improvement in key areas, including debit service coverage ratios and capital expenditure to depreciation ratios. There was an overall decline in net operating margins across organization types, which is a reflection of declining profitability; challenges with occupancy, specifically in AL and SNF, were identified as the driver of that NOM trend. The report also addresses rising construction and renovation costs; and financial measures such as days cash on hand, unrestricted cash & investments, debt service coverage, and capital expenditures to depreciation ratios. The volume of refinancing activity this year was also down significantly compared to last year. Shortly before the webinar, Ziegler also released this summary report on the CARF publication, which describes the key ratio measures by organization type and juxtaposes these with their own recently-released ratios report.
