Question: OHA has indicated that we should maintain a debt to asset ratio no higher than 40 percent. Given this, how much additional long-term debt could

OHA has indicated that we should maintain a debt to asset ratio no higher than 40
percent. Given this, how much additional long-term debt could have been added in 2017?
We would use this additional debt to finance new construction, renovations, and the
acquisition of technology. To finance this additional long-term debt we would use bonds.
As such, we need to assess our credit worthiness. The following are the select median
values for specific financial ratios for hospitals that received "below investment grade
(BBB)" and "high investment grade (AA)" bond ratings.
Assess and report Webster's position with recommendations. Are Webster's bonds
more likely to be rated as AA or BBB? Why?

Table III.5 Comparison of Financial Ratios by Bond Rating Bond Grade BBB Days Cash on Hand 194 53.6 Days in Accounts Receivables 58.0 47.7 Days in Current Liabilities 62.3 64.7 Cash to Debt (%) 153.9 37.9 Total Margin-% 4.1 (0.3)

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