Ratio analysis. The statement of operations and balance sheet for Longwood Community Hospital for the years ended 20X0 and 20X1 are shown in Exhibits 4.19a and 4.19b.

Compute the following ratios for both years: current, acid test, days in accounts receivable, average payment period, long-term debt to net assets, net assets to total assets, total asset turnover, fixed asset turnover, operating revenue per adjusted discharge, operating expense per adjusted discharge, salary and benefit expense as a percentage of total operating expense, return on total assets, and operating margin. After calculating the ratios, comment on Longwood’s liquidity; efficient use of assets or activity ratios; revenue, expense, and profitability; and capital structure relative to its industry benchmarks for its respective bed size (listed in Exhibit 4.16a). Cite at least two meaningful ratios per category. Assume for this analysis that Longwood is a 350-bed facility and its adjusted discharges were 5,500 for 20X0 and 5,400 for 20X1.

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EXHIBIT 4.19a STATEMENT OF OPERATIONS FOR LONGWOOD COMMUNITY HOSPITAL Revenues Longwood Community Hospital Statement of Operations for the Years Ended December 31, 20X1 and 20X0 (in thousands) 20X1 20X0 Net patient service revenue Other revenue Total operating revenues $54,000 $53,000 1,000 500 55,000 53,500 Expenses Salaries and benefits 23,000 22,000 Supplies and other expenses 20,000 23,000 Depreciation 10,000 9,000 Total operating expenses 53,000 54,000 Operating income 2,000 (500) Excess of revenues over expenses 2,000 (500) Increase (decrease) in net assets $2,000 ($500)