CHAPTER 17: FINANCIAL CONDITION ANALYSIS Homework Problem 5.1 Calculate the following ratios based upon data The Heart Hospital financial statements. Show Work Peer Group Average RATIOS Heart Hospital The Heart Hospital Statement of Income and Retained Earnings Year Ended December 31, 2020 in thousands) PROFITABIUTY Total Margin 15.0% Net patient service revenue s 64.SOS Operating Margin 16.0% S Persamel expense Medical supplies and drugs Other operating expenses Interest expense Depreciation Total operating expenses Incone from operations Non-Operating income Net income 21,707 15,047 9,721 1,322 2,625 50,422 14,083 159 14,242 ROA (return on assets) 22.5% $ s $ ROE return on equity) 37.6% LIQUIDITY RATIOS Green Valley Healthcare, Inc. Balance Sheet Year Ended December 31, 2020 (in thousands) Current Ratio 2.0 Days Cash on Hand 85 Cash and equivalents Net patient acts receivable Supplies inventary Prepaid expenses and other current assets Total current assets Property and equipment Less accumulated depreciation Net property and equipment Other assets Total asset S 14,202 5,918 1,211 1,429 S 22,760 $ 47,311 13,542 s 33,769 S 901 S 57,430 Debt Ratio 40.0% Debt to Equity Ratio 0.67 Times Interest Earned 5.0 Accounts payable Accrued compensation and benefits Other accrued abilities Current portion of long-term debt Total current abilities Long-term debat Total liabilities Owners' equity Total liabilities & equity S 1,910 2,543 1,843 2,064 $ 8.360 S 21,640 $ 30,000 $ 27 430 $ 57.430 ASSET MANAGEMENT RATIOS Fixed Asset Turnover 14 Total Asset Turnover 1.50 Days in Patient AR 20.0 Average Age of Plant 115 CHAPTER 17: FINANCIAL CONDITION ANALYSIS Homework Problem 5.1 Calculate the following ratios based upon data The Heart Hospital financial statements. Show Work Peer Group Average RATIOS Heart Hospital The Heart Hospital Statement of Income and Retained Earnings Year Ended December 31, 2020 in thousands) PROFITABIUTY Total Margin 15.0% Net patient service revenue s 64.SOS Operating Margin 16.0% S Persamel expense Medical supplies and drugs Other operating expenses Interest expense Depreciation Total operating expenses Incone from operations Non-Operating income Net income 21,707 15,047 9,721 1,322 2,625 50,422 14,083 159 14,242 ROA (return on assets) 22.5% $ s $ ROE return on equity) 37.6% LIQUIDITY RATIOS Green Valley Healthcare, Inc. Balance Sheet Year Ended December 31, 2020 (in thousands) Current Ratio 2.0 Days Cash on Hand 85 Cash and equivalents Net patient acts receivable Supplies inventary Prepaid expenses and other current assets Total current assets Property and equipment Less accumulated depreciation Net property and equipment Other assets Total asset S 14,202 5,918 1,211 1,429 S 22,760 $ 47,311 13,542 s 33,769 S 901 S 57,430 Debt Ratio 40.0% Debt to Equity Ratio 0.67 Times Interest Earned 5.0 Accounts payable Accrued compensation and benefits Other accrued abilities Current portion of long-term debt Total current abilities Long-term debat Total liabilities Owners' equity Total liabilities & equity S 1,910 2,543 1,843 2,064 $ 8.360 S 21,640 $ 30,000 $ 27 430 $ 57.430 ASSET MANAGEMENT RATIOS Fixed Asset Turnover 14 Total Asset Turnover 1.50 Days in Patient AR 20.0 Average Age of Plant 115