Discovering What the ADS Financial Indicator Results Can Reveal About our Field

NADSA, CARF International, and Reinsel Kuntz Lesher LLP are conducting the 2016 ADS financial indicators study in fulfillment of the goal to develop financial benchmarks for the Adult Day Services field. This is the 7th year of this study and NADSA offers Annual Meeting presentation to reveal the study findings as well as a webinar for members. ADS centers that participated in the study also receive complementary individualized reports with their benchmarking data. If your organization is an Adult Day Services provider, you are invited to participate in this complementary study. Instructions for participation are included in this article along with why this is valuable for your organization, and highlights from last year’s study.

The ADS Financial Indicators Study includes ratios for all participants and it allows for comparison of the same participants’ financial results year over year. The types of ratios presented in the study include the following margin (profitability) ratios:

• Net Operating Margin (NOM) Ratio – The Net Operating Margin (NOM) ratio looks at the core, sustainable business of an ADS provider, that is, the revenues and expenses realized solely in the delivery of services to clients. The purpose of this ratio is to provide a benchmark from which providers can determine the margin generated by cash operating revenues after payment of operating expenses.
• Operating Ratio (OR) – The Operating Ratio (OR) measures whether current year cash operating revenues are sufficient to cover current year cash operating expenses.
• Operating Margin (OM) Ratio – The Operating Margin (OM) ratio measures the portion of total operating revenues remaining after operating expenses are met.
• Total Excess Margin (TEM) Ratio – The Total Excess Margin (TEM) ratio includes both operating and non-operating sources of revenue and gains.

Key observations from the 2015 study, reflecting 82 ADS representing 41 organizations, include:

• ADS providers continued to experience weak operating performance, but also continued to achieve better results from the prior year. In fact, the medians for all ratios for all participants and “same-store” participants were the best amounts in the study’s history.
• The medians for NOM and TEM were positive for the first time. The OR median; however, was again unfavorable (greater than 100%) but improved from the prior year. Over half of ADS providers had positive financial results, and for some ratios, the percentage was as high as 52% of providers with positive financial results. This positive trend in financial results from the prior year also occurred within each quartile for every ratio.
• The results for the OM ratio were weaker than NOM and OR because of the addition of depreciation and amortization. The lower results were not significant; however, suggesting that many providers had limited fixed assets.
• The best result of all the Margin Ratios was the TEM ratio, which indicates that providers may rely on contributions from donors and corporate donations to fund operations.

The value of financial benchmarking information offers measurability of several key business areas for ADS organizations. This measurability, if used proactively by organization leaders, can lead to increase in funding from grants, contributions, and possibly even higher reimbursement rates resulting from effective legislative advocacy. In today’s environment, “telling your story” has little meaning unless you include data to support the value and the needs of the sector. Ratios can also reveal trends that can be tracked from year to year-underscoring the fact that, despite effective management with very limited resources, there is a revenue problem for many providers. Finally, benchmarking promotes collaboration among field leaders to develop educational approaches and resources to address identified needs in the sector.

If your organization is an Adult Day Services provider, you are invited to participate in this complementary study. To participate, please send the following information by email to or fax to 1-202-587-5009 by Thursday, June 30, 2016:

For your adult day service program’s fiscal year ending in 2015:

o Internal unaudited 2015 fiscal year Financial Statements including Revenue and Expense, Balance Sheet, and Cash Flows or;
o Corporate audit Financial Statements for 2015 fiscal year (if available).
Note: If your financial information is consolidated for a larger organization, please clearly identify the adult day services financials or send a separate report with only the adult day services financial information.

Mr. Jeff Boland, Partner, Reinsel Kuntz Lesher LLP will be analyzing the financial data submitted. Mr. Boland is a representative from CARF’s Financial Advisory Panel (FAP). He has presented the results of the last 6 studies at the NADSA Annual Conferences in 2010-2015. For more information on the FAP, see and type “FAP” in the search field.

CARF, NADSA and RKL view this initiative as a way to add significant value to the ADS field. For additional information, please contact or toll-free 1-888-281-6531, ext. 5006.


Susanne Matthiesen, MBA
Managing Director, Aging Services
CARF International
1730 Rhode Island Ave., NW, Suite 410
Washington, D.C. 20036
Telephone: (888) 281- 6531 ext. 5006


Jeffrey E. Boland, CPA
Partner, Senior Living Services Consulting
Reinsel Kuntz Lesher LLP
320 Market Street, Suite 373 East
Harrisburg, PA 17108
Telephone: (717) 409-8844

Posted in Advocacy, Research