Bayside Memorial Hospital's financial statements are presented in Exhibits 13.1, 13.2, and 13.3 in the textbook.

a.) Calculate Bayside's financial ratios for 2009. Assume that Bayside had $1 million in lease payments and $1.4 million in debt principal repayments in 2013. (Hint: Use the textbook discussion to report the 2014 financila ratios and the Industry averages)

b.) Interpret the ratios. Use both trend and comparative analysis. For the comparative analysis, assume that the industry average data presented in the textbook is valid for both 2013 and 2014.

Answer a.)

	2014	2013	Industry
Profitability Ratios:
Total margin = Net income / Total revenues
Return on assets = Net income / Total assets
Return on equity = Net income / Total equity
Liquidity Ratios:
Current ratio = Current assets / Current liabilities
Days cash on hand = (Cash + Marketable securities) / (Expenses - Depreciation - Uncollectibles / 365)
Debt Management Ratios:
Debt ratio = Total debt / Total assets
Debt to equity ratio = Total debt / Total equity
TIE ratio = EBIT / Interest expense
CFC ratio = (EBIT + Lease payments + Depreciation expense) / (Interest expense + Lease payments + Debt principal / (1-T))
Asset Management Ratios:
Fixed asset turnover = Total revenues / Net fixed assets
Total asset turnover ratio = Total revenues / Total assets
Days in patient accounts receivable = (Net patient accounts receivable) / (Net patient services revenue / 365)
Other Ratios:
Average age of plant = (Accumulated depreciation) / (Depreciation Expense)

Balance Sheets 2014 and 2013:

EXHIBITS 13.1 Bayside Bayside Industry Average 93.3% Memorial Patient service revenue 90.4% Less: Provision for bad debts Hospital 90.4% Net patient service revenue 87.4% Common Size Premium revenue 4.6 7.2 Income other revenue Statement Total operating revenues 98.2% for 2014 Expenses: Nursing services 51.1% 50.7% Dietary services 4.8 General services 11.6 11.5 Administrative services 10.0 10.2 Employee health and welfare 9.0 Malpractice insurance 1.2 1.0 Depreciation 3.6 Interest expense Total expenses 92.5% 92.2% Operating income 4.8% 5.7% Nonoperating income 1.8 Net income 5.0% 7.5% Note: This table contains inconsistencies because values are rounded to the nearest ten percent. of a