Here Are Five Financial Ratios to Know about Your Practice


Just like there are ratios that gauge your patients’ health, there are ratios to gauge the financial health of your practice.

As physicians we are quite familiar with methods in discovering the health of our patients. We use measures such as HDL:LDL ratio, waist to height, waist to hip, and many other measurements to determine the health of our patients. In fact, we’re pretty good at it. We can even use this data to predict what problems the patients will face and even how long they might live.

Did you know there are similar ratios and methods that accountants and business leaders use to determine the financial health of a company? These ratios can tell you the financial health of your practice. I’ve listed the top five financial metrics that every physician should know and use every month.

These are just a few the financial ratios physicians can perform using the income statements and balance sheets provided to them by their accountants and office managers. These ratios will help you determine the level of financial stability of your practice and help you make better decisions for your future. Financial health is hard work. Just like we ask our patients to keep track of their diet and exercise activity, we should also closely monitor the financial health of our practices. We must be diligent actively manage our business.

About the Author

David Norris, MD, MBA is an anesthesiologist at Wichita Anesthesiology Chartered in Wichita, Kansas and also with the Center for Professional Business Development