Horizontal, Vertical, and Ratio Analyses. Exhibits 4–27a and 4–27b show the statement of operations and balance sheet for 190-bed Lake Community Hospital for 20X0 and 20X1.

a. Perform a horizontal analysis on both statements.

b. Perform a vertical analysis on both statements relative to 20X0.

c. Compute all the selected ratios listed in Exhibit 4–16a, and compare them to the standard.

Using these financial performance measures, evaluate the financial state of Lake Community. The debt principal payments each year are $40,000.