Reading a CCRC's finances: days cash, debt coverage and covenants

An entrance fee is paid up front for care that may be delivered fifteen or twenty years later. Whether that promise holds depends on the finances of the organisation behind the community, which every filing on this site includes. Four measures carry most of the signal.

Days cash on hand

How many days the community could pay its operating costs from cash and unrestricted investments if no money came in. The standard formula is (cash + unrestricted investments) ÷ ((operating expenses − depreciation − amortisation) ÷ 365). Most filings state the figure; when one gives only the raw statements, we apply that formula and say so on the page.

107 of the 117 communities on this site have a figure (22 of them calculated by us); the middle value among them is 301 days. For context, Ziegler’s median for fiscal 2022 across 132 bond-financed not-for-profit entrance-fee communities was 321 days: 438 for those with an investment-grade rating and 206 for the rest (Ziegler). LeadingAge says experts look for 120 to 200 (LeadingAge).

Debt service coverage

Cash available for debt payments divided by the debt payments due that year: 2.0x means twice what was needed. Ziegler’s fiscal 2022 median was 1.8x. Communities without bonds often do not report it.

Covenants: the lender’s minimum

A community that borrowed through bonds has promised its lenders to keep these ratios above set minimums, called covenants. Typical floors are far below the medians: one obligated group’s June 2026 report shows a covenant of 60 days cash and 1.15x coverage (Lifespace CMW report). Meeting a covenant therefore says little; missing one matters. A miss can lead to talks with bondholders, and Ziegler counts a forbearance on debt payments that bondholders accept as a default (Ziegler default study). 37 of the filings on this site state the covenant minimum; the community pages show it beside the figure.

Occupancy

Entrance fees from new residents fund refunds to departing ones and pay down debt, so empty independent-living units hurt twice. Watch the trend across years more than any single figure.

Entrance-fee liabilities and net position

The balance sheet separates entrance fees not yet earned (deferred revenue, which the community recognises over residents’ expected stays) from refunds it owes. Because deferred revenue counts as a liability, a community can show a negative net position while holding a large cash reserve; read it with the cash measures, not alone.

Why some figures cover several communities

Communities run by the same organisation often borrow together as an “obligated group” and report one set of ratios for all of them. 55 of the communities here belong to such a group. Some filings report only the group’s figures, others give each campus its own column; the community page names whose figures are shown, because the group’s cash also stands behind the other campuses’ promises.

Ziegler’s study of 790 borrowers found that 89% of those that defaulted between 1990 and 2024 were single-site communities (Ziegler), which is one reason group backing can matter. It is not a guarantee: a group can also move money away from a campus.