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Overall, the financial health of Hopeful Happy Health Care Systems (HHHCS) is adequate. The biggest area of concern is with respect to profitability, as the company has very low operating margins. In 2000, the company barely turned a profit, and although 2001 represented an improvement, that improvement was somewhat limited, and the ROA was still below 1%. It is expected that a firm with health profits is able to generate a much higher ROA.

The most alarming of other figures is the accounts receivable turnover. At 176 days, this turnover is far too slow. The combination of narrow margins and high A/R turnover in day means that the company could find itself subject to cash crunches from time to time. It should be noted, however, that 176 days is a substantial improvement over the previous year.

Most of the other ratios held more or less flat. This indicates that the company's operations are fairly static, so limited changes can be expected in the future. HHHCS has made improvements in the areas where it needed to, which is encouraging. In future, the company should focus on improving its operating margins, as this would have a positive impact on a number of other key ratios as well. The firm has a healthy level of debt, but should hold the line on taking on new debt until there is evidence of significant revenue expansion.