Case 4.1: East Pacific Hospital Key concept: Computin concept: Computing basic financial ratios for a not-for-profit hospital he East Pacific Hospital, a nonprofit entity, has been experiencing declining operat- ing revenues, and the CEO is concerned about future financial performance. The most recent summary operations statement and balance sheet are shown here: East Pacific Hospital Operations Statement for Year Ended December 31, 2015 Revenues $96,000,000 Expenses 94,000,000 Operating income $2,000,000 East Pacific Hospital Balance Sheet December 31, 2015 and 2014 2015 2014 Assets Current assets Property, plant, and equipment Total assets $21,000,000 64,000,000 $85,000,000 $18,000,000 63,000,000 $81,000,000 Liabilities and net assets Liabilities Current liabilities Bonds payable Total liabilities Net assets $17,000,000 64,000,000 81,000,000 $14,000,000 65,000,000 79,000,000 4,000,000 2,000,000 Unrestricted net assets Total liabilities and net assets $85,000,000 $81,000,000 Assignments and Questions he industry aver io for 2015. Is this good if the indus 1. Compute the total profit margin ratio age is 2.5 percent? the industry average 2. Compute the return on assets ratio for 2015. Is this good if the industry is 8.3 percent? 3. Compute the return on equity ratio for 2015. Is this good if the industry average is 5 percent? 4. What balance sheet account provides the link between the balance sheet and the operations statement