Question
22. a) Calculate the financial ratios below for 20X1. - Ratios for 20X0 are shown so that you can check the formulas you use -
22. a) Calculate the financial ratios below for 20X1.
- Ratios for 20X0 are shown so that you can check the formulas you use
- Note that dollar amounts on the Balance Sheet and Statement of Operations are stated in thousands (the final 3 zeroes are omitted). In the text of the problem, however, annual debt Principal Payments and numbers of Adjusted Discharges are not stated in thousands (that is, no zeroes are omitted).
Ratios | 20X0 |
Liquidity Ratios | |
Current Ratio | 3.06 |
Days in Accounts Receivable | 59 |
Days Cash on Hand | 208 |
Average Payment Period (Days) | 41 |
Revenue, Expense, & Profitability Ratios | |
Operating Revenue per Adjusted Discharge | $7,993 |
Operating Expense per Adjusted Discharge | $7,659 |
Salary & Benefit Exp. as % of Operating Exp. | 63% |
Operating Margin | 0.04 |
Return on Net Assets | 0.21 |
Activity Ratios | |
Total Asset Turnover Ratio | 0.99 |
Age of Plant | 7.11 |
Capital Structure Ratios | |
Long-Term Debt to Net Assets | 1.98 |
Net Assets to Total Assets | 0.30 |
Debt Service Coverage Ratio | 2.21 |
b) Using the ratios for 20X0 and 20X1, evaluate the financial status of Island Regional Medical Center. Be sure to comment on its liquidity, profitability, activity, capital structure, and overall financial condition.
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