ASSET MANAGEMENT RATIO WORKSHEET

ADOPT-A-HOSPITAL ASSIGNMENT

HA 582 HEALTH CARE BUDGETING & REIMBURSEMENT

Assignment. The goal of this ratio analysis exercise is to calculate the Asset Management ratios below based on the audited financial statements for Marion Healths 2022 audit report.

For this exercise, you will need to use the Statement of Operations (page 6 and Balance Sheet (pages 4 and 5). Note also that you may need to consult the Notes to Financial Statements. As reminder, please review the Footnotes provided on this worksheet. Also, Chapter 13 - Financial Condition Analysis is an excellent source for interpreting the meaning of each ratio.

Note also that you will not post your worksheet to Canvas. Rather, once youve calculated each Asset Management ratio, there is an Adopt-a-Hospital quiz portal that will ask you to provide your calculated results plus answer a few other questions about Marion General Hospitals Asset Management status. The goal is to let these ratios speak to you about the Asset Management strength or weakness of Hancock Regional.

Ratio Analysis Asset Management

I. Asset Management [Provide a solid definition of asset management, including what asset management tells you about Marion General as healthcare organization. A general, simple one sentence definition will not be sufficient for this assignment.](10 points)

a. The asset management ratio Fixed Asset Turnover Ratio = Total revenues/Net fixed assets (12 points)

Total operating revenue =

Total non-operating revenue = ________________

Total revenues =

Net fixed assets¹ =

Fixed Asset Turnover Ratio =

Fixed Asset Turnover Ratio =

Peer-group average = 2.2

b. The asset management ratio - Days in patient accounts receivable. (12 points)

DPAR = Net patient accounts receivable/(Net patient service revenue/365)

Net patient accounts receivable⁴ =

Net patient service revenue⁵ =

Net patient service revenue/365 =

DPAR =

DPAR =

Peer-group average = 64.0 days

c. The asset management ratio Total Assets Turnover = Total revenues/Total assets (12 points)

Total operating revenue =

Total non-operating revenue = ______________________

Total revenues =

Total assets =

Total assets turnover ratio =

Total assets turnover ratio =

Peer-group average = 0.97

d. The asset management ratio Average Age of Plant =

Accumulated depreciation/Depreciation expense (12 points)

Accumulated depreciation³ =

Depreciation expense² =

Average age of plant =

Average age of plant =

Peer-group average = 9.1 years

e. Asset Management Summary. (12 points)

Footnotes

¹For Net fixed assets use Property and equipment, net on page 4 of Balance Sheet

²For Depreciation expense use Depreciation and amortization on page 6

³See page 21 under 5. Property and Equipment for Accumulated depreciation for 2022

⁴Use Accounts receivable, Patient services on page 4.

⁵Use Patient service revenue on page 6.