Horizontal, vertical, and ratio analyses. Exhibits 4.27a and 4.27b show the statement of operations and balance sheet for the 310-bed Wakeland Community Hospital for 20X0 and 20X1. Adjusted discharges for 20X0 and 20X1 are 25,000 and 26,000, respectively.

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 with the industry benchmarks.

Using these financial performance measures, evaluate the financial state of Wakeland Community. The debt principal payments each year are $5.5 million, whereas adjusted discharges, as mentioned, are 25,000 in 20X0 and 26,000 in 20X1.

Transcribed Image Text:

EXHIBIT 4.27a STATEMENT OF OPERATIONS FOR WAKELAND COMMUNITY HOSPITAL Wakeland Community Hospital Statement of Operations for the Years Ended December 31, 20X1 and 20X0 (In thousands) 20X1 20X0 Revenues Net patient service revenue $225,000 $210,000 Other operating revenue 6,400 5,700 Total operating revenues 231,400 215,700 Operating expenses Salaries and benefits 124,173 110,167 Supplies and other expenses 85,000 61,000 Depreciation 12,000 11,300 Interest 4,500 2,500 Total operating expenses 225,673 184,967 Income from operations 5,727 30,733 Nonoperating Income Investment income/contributions 7,500 8,500 Excess of revenue over expenses 13,227 39,233 Net Income $13,227 $39,233