The solvency ratio of a for-profit hospital decreased for six consecutive years and then went up. What are possible explanations for the increased ratio?

What will be an ideal response?

The hospital could have borrowed money for expansion, reconstruction, or purchase of capital equipment. The hospital could have lost net worth because one of its buildings was condemned. The hospital could have had a large fall in revenues due to competition from a new hospital, a prolonged nursing strike, or a change in reimbursement (such as the switch from fee-for-service payments to diagnosis-related groups payments).