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Article: Risk factor helps determine debt maturity mix.
- Article from:
- Healthcare Financial Management
- Article date:
- November 1, 1990
- Author:
CopyrightCOPYRIGHT 1990 Healthcare Financial Management Association. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Risk factor helps determine debt maturity mix Healthcare financial managers face two decisions regarding the capital structures of their organizations. They first must decide the appropriate mix of debt and equity (or fund) financing. Then, considering the optimal total amount of debt, managers must choose a debt maturity structure that best mixes short- and long-term debt.
Most businesses, healthcare organizations included, experience seasonal fluctuations in demand and, as a result, revenue. Most businesses also are subject to cyclical swings in sales that result from local, regional, national, and global business cycles. Although the healthcare industry has ...