What does operating margin tell you about the organization, and how would you calculate this ratio?

What does operating margin tell you about the organization, and how would you calculate this ratio?

Select a local medical service organization and describe how it has specifically improved its operating margins.

Michael Dean has been recently appointed to the board of Kenyon Medical Center, a 300-bed, not-for-profit community hospital. Mike is an attorney who specializes in labor law and is the firms primary litigation expert in this area. He is reviewing the financial information that was sent to him this morning in preparation for his first board meeting this evening. His total financial package includes 28 pages of financial information consisting of current monthly income statements, a balance sheet, and other monthly actual-to-budget comparisons of performance with some selected financial ratios.
Tonights meeting is critical because the boards major item for discussion is related to a proposed bond issue to finance major hospital renovation. Mike recognizes that he has a fiduciary responsibility to protect the assets of the hospital and to ensure its continued financial viability, but he does not know how to determine whether the hospital can afford to take on this additional debt. There is so much information and no apparent pattern as to what really is important. He is also concerned about assessing how the proposed financing would impact the hospitals financial performance and thus its ability to repay both interest and principal on the debt. He recently read a report on dashboard reporting and wonders if some structure like this would help him and other board members to get a better appreciation for the financial performance of the hospital.

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Overall
ROE % 7.5 7.6 9.9 5.9 5.7
Total margin % 6.5 6.6 8.6 5.2 4.9
Financial Strength Index 2.2 1.9 3.1 2.2 2.3
Nonoperating income
Days cash on hand 86 77 108 108 125
Investment efficiency
Days in accounts receivable 69 63 53 55 46
Revenue to net fixed assets 1.9 1.7 1.7 1.7 1.8
Plant obsolescence
Average age of plant 6.9 7.1 7.7 8.3 9.1
Capital position
Debt financing % 20.8 23.1 19.6 17.5 19.3
Cash flow to debt % 49.9 43.4 61.9 52.2 44.8