Horizontal, vertical, and ratio analyses. Exhibits 4.30a and 4.30b show the balance sheet and income statement for the 660-bed Williams Academic Medical Center for the years 20X0 and 20X1. Assume that principal payments each year come to $5,500,000 and that adjusted discharges are 120,000 for 20X0 and 125,000 for 20X1.

a. Perform full horizontal and vertical analyses on the balance sheet.

b. Perform full horizontal and vertical analyses on the income statement.

c. Calculate every ratio described in the chapter for both years, and compare these ratios with the benchmarks (Exhibit 4.16a).

Discuss Williams’s current financial position and future outlook based on these results.

Make the basis for the vertical analysis the year 20X0.

Transcribed Image Text:

EXHIBIT 4.30a BALANCE SHEET FOR WILLIAMS ACADEMIC MEDICAL CENTER Williams Academic Medical Center Balance Sheet December 31, 20X0 and 20X1 (In thousands) 20X1 20X0 Current assets Cash and cash equivalents $66,300 $63,500 Patient accounts receivables, net 105,000 125,000 Inventories 69,500 62,000 Other current assets 3,000 2,400 Total current assets 243,800 252,900 Plant, property, and equipment Gross plant, property, and equipment 1,040,000 976,000 (Less accumulated depreciation) (254,000) (326,000) Net property, plant, and equipment 786,000 650,000 Long-term investments 195,000 175,000 Total assets $1,224,800 $1,077,900 Current liabilities Accounts payable $87,200 $89,000 Salaries payable 23,000 20,000 Notes payable 3,200 3,000 Other current liabilities 2,100 1,200 Total current liabilities 115,500 113,200 Noncurrent liabilities Bonds payable 466,500 461,000 Total noncurrent liabilities 466,500 461,000 Owners' equity 642,800 503,700 Total liabilities and equity $1,224,800 $1,077,900