Assessment

Suggest ratios that the Board should take into consideration prior to making a decision on whether or not to seek out bond financing for the proposed hospital renovation project.

As an experienced labor law attorney who recently joined the Board of Directors of the hospital system, determine whether the hospital should consider a bond to finance a major hospital renovation.

The Board is trying to secure bond financing (long-term debt) to raise some or all of the capital for this proposed project.

Does this make sense given the current financial position of the organization?

There is no one uniform methodological approach for assessing the financial position of the organization before making capital financing decisions.

All financial decisions should not only rely upon the numbers, but that qualitative factors and ethical implications should also be factored into the decision-making process. This doesnt mean that the numbers should be ignored, but rather an acknowledgment that decisions need to take into consideration other relevant implications before being finalized.