1.Suppose that two hospitals are identical in all ways except that Hospital N is relatively new while Hospital O is relatively old. Which of the following statements about a comparative financial statement analysis is true? (Hint: Think about both the cost of assets over time and depreciation expense.)

a.Hospital N will report higher net income. b.Hospital O will report higher net income. c.Hospital N will report higher net fixed assets. d.Hospital O will report higher net fixed assets. e.Both b. and c. above are correct.

2.The statement of changes in equity (net assets) indicates how much of an organizations net income is retained within the business and hence flows through to the balance sheet equity account. a.True b.False

3.The Bramwell Clinic has net income of $200,000 on revenues of $2,000,000. If the firm has total debt of $500,000 and a debt ratio of 50 percent, what is Bramwell's return on assets (ROA)?

a. 5.0%

b. 10.0%

c. 15.0%

d. 20.0%

e. 25.0%

4.The primary difference between financial statement analysis and operating indicator analysis is that operating indicator analysis does not use benchmarking while financial statement analysis does. a.True b.false

5.White Memorial Hospital has a total (profit) margin of 4.0 percent on revenues of $10 million. Its assets total $5 million and it uses $2 million total in debt financing. What is the hospital's return on equity (ROE)? (Hint: Use the Du Pont equation.)

a. 13.3%

b. 12.0%

c. 10.3%

d. 7.6%

e. 5.3%