Ratio analysis. Exhibits 4.20a and 4.20b show the statement of operations and balance sheet for Louisville Community Hospital for the years ended 20X0 and 20X1. Compute the following ratios for both years: current, quick, acid test, days in accounts receivable, days cash on hand, average payment period, operating revenue per adjusted discharge, operating expense per adjusted discharge, salary and benefit expense as a percentage of total operating expense, operating margin, nonoperating revenue, return on total assets and net assets, total asset turnover, fixed asset turnover, age of plant, long-term debt to net assets, and net assets to total assets. Comment on Louisville’s liquidity; efficient use of assets; revenue, expense, and profitability; and capital structure, citing at least one ratio per category. Use the national hospital industry benchmarks listed in Exhibit 4.16a for 125 beds, and assume that Louisville’s adjusted discharges were 3,100 for 20X0 and 3,300 for 20X1.

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EXHIBIT 4.20a STATEMENT OF OPERATIONS FOR LOUISVILLE COMMUNITY HOSPITAL Louisville Community Hospital Statement of Operations for the Years Ended December 31, 20X1 and 20X0 (In thousands) 20X1 20X0 Revenues Net patient service revenue $23,000 $19,000 Net assets released from restriction 1,000 800 Total operating revenues 24,000 19,800 Expenses Salaries and benefits 13,000 9,000 Supplies and other expenses 7,000 6,000 Depreciation 2,500 2,000 General services 200 100 Total operating expenses 22,700 17,100 Operating income 1,300 2,700 Nonoperating income 4,000 2,500 Excess of revenue over expenses 5,300 5,200 Increase (decrease) In net assets $5,300 $5,200