17.7 Recent financial statements for the Heart Hospital are provided below: The Heart Hospital Balance Sheet 30-Sep-20 (in thousands) Current assets: Cash $14,202 Accounts Receivable, net $5,918 Medical supplies inventory $1,211 Prepaid expenses and other current assets $1,429 Total current assets $22,760 PPE, net $33,769 Other assets $901 Total assets $57,430 Current liabilities: Accounts payable $1,910 Accrued compensation and benefits $2,543 Other accrrued liabilities $1,843 Current portion of LT debt $2,064 Total current liabilities $8,360 Long-term debt $21,640 Total Liabilities $30,000 Owners' equity $27,430 Total liabilities and owners' equity $57,430 The Heart Hospital Statement of Operations Year Ended September 30, 2020 (in thousands) Net patient service revenue $64,505 Operating expenses: Personnel expense $21,707 Medical supplies expense $15,047 Other operating expenses $9,721 Depreciation expense $2,625 Total operating expenses $49,100 Income from operations $15,405 Other income (expenses): Interest expense -$1,322 Interest and other income, net $159 Total other income (exp), net -$1,163 Net income $14,242 a. Perform a Du Pont analysis on the Heart Hospital. Assume that the peer group average ratios are as follows: Total margin 15% Total asset turnover 1.5 Equity multiplier 1.67 ROE 37.60% b. Calculate and interpret the following ratios for the Heart Hospital: Peer Group Average ROA 22.50% Current ratio 2.0 Days cash on hand 85 days Average collection period 20 days Debt ratio 40% Debt-to-equity ratio 0.67 Times interest earned ratio 5.0 Fixed asset turnover ratio 1.4