Applying Grey Models to Forecast Financial Ratios of National Health Insurance in Taiwan

The main purpose of this study is to predict and analyze the financial ratios of Bureau of National Health Insurance in the near future. We apply GM(1,1) model and Tan's modified GM(1,1) model to forecast 4 financial ratios of Bureau of National Health Insurance, Le. debt ratio, receivables turnover, current ratio and quick ratio, to analyze its financial performance. The original GM(1,1) model performs better in all these four cases. The results reveal that BNHI has no instant risk of insolvency, its credit policy will be less liberal, but the risk illiquidity emerge since 2004 and getting worse in the future.