EXES AND EXERCISES, SUPPLEMENTAL MATERIALS AND SOLUTIONS To understand how the info the band the den nisoned Fate 13-te the proces Thure Bakes the balances and expense that we need in the preconcha qui ration. The multiple contato Expert Q&A My question refers to practice exercise 12-1 Liquidity Ratios in Health Care Finance Basi Tools for Nonfinancial Managers 5th edition. I need help figuring the days cash on hand and days receivable using pages 533-534 in the book. There were some tips given by t instructor. Net Receivables = (patient accounts receivable + any other accounts receivable) or ($40,000 + 0)=Numerator Net Credit Revenue = Net Patient Service Revenue (do not worry about percentage of credit revenue in this calculation) Net Credit Revenue = $180,000. Therefore, ($180,00 of day in the period)= Denominator. 16 CHAPTER 12 Example 124 Chapter 11 Doctors Smith and Brown: Statement of Net Income for the Three Months Ended March 31, 2 sente 180,000 A Net patient service revenue Other revenue fal Operating Revenue 180,000 lipenses Nursing/PA salaries Clerical salaries Paroll taxes/employee benefits Medical supplies and drugs Professional fees Dues and publications Janitorial service Office supplies Repairs and maintenance Utilities and telephone Depreciation Interest Other Tial Expenses lucome from Operations konoperating Gains (Losses) Interest Income Tonoperating Gains, Net 16,650 10.150 4,800 15,000 3,000 2,400 1.200 1,500 1.200 6,000 30,000 3.100 5.000 100.000 80,000 1) 80,000 Set Income SH EXAMPLES AND EXERCISES, SUPPLEMENTAL MATERIALS, AND SOLUTION Dato Smith and Brown Balance Sheet March 31.9 5.000 70,000 920,000 10.000 1.000.000 Curent Ants 125.000 Chand cash equalents 40.000 Patient accounts receivable Inventories applies and drugs Total Current Assets Property. Plant, and Equipment 500,000 Buildings and Improvements 800.000 Equipment 1.300.000 Tood Less Accumulated Depreciation (180,000 820,000 Net Depreciable Assets Land 100,000 Property. Plant, and Equipment, Net Other Awets Total Assets Liabilities and Capital Current Liabilities Current maturities of long-term 10.000 debt Accounts payable and accrued 20,000 expenses Total Current Liabilities Long-Term Debt 180.000 Less Current Portion of Long-Term Debt (10,000) Net Long Term Debt Total Liabilities Gapital Total Liabilities and Capital Doctors Smith and Brown Statement of Changes in Capital for the Three Months Ended March 31,2 Beginning Balance $720,000 Net Income 80,000 Ending Balance $800,000 30.000 170,000 200,000 800,000 1,000,000 od 5-16 EXAMPLES AND EXERCISES, SUPPLEMENTAL MATERIALS, AND SOLUTIONS calculation is obtained. Figure 12-illustrates the proces This figure takes the balance she To better understand how the information for the numerator and the denominator of and the statement of revenue and expense that were discussed in the preceding Chapter illustrate the source of each figure in the four liquidity ratios. The multiple comitations in cascash on hand and in das receivables are further broken out into a three-step process to Two of the liquidity ratios are illustrated in this practice exercise. Refer to Doctor Smith and CHAPTER 12 Example 12A better illustrate sources of information Practice Exercise 12-1: Liquidity Ratios Brown's financial statements appearing in the preceding exercises for Chapter 11. Required 1. Set up a worksheet for the current ratio and the quick ratio 2. Compute the natios for Doctors Smith and Brown Assignment Exercise 12-1: Liquidity Ratios Refer to the Metropolis Health System (MHS) case study appearing in Chapter 33 Required 1. Set up a worksheet for the liquidity ratios. 2. Compute the four liquidity ratios using the MHS financial statements appearing in Chapter 33 Example 12B To better understand how the information for the numerator and the denominator of each calculation is obtained, Figure 12-2 illustrates the process. This figure takes the balance sheet and the statement of revenue and expense that were discussed in the preceding chapter and illustrates the source of each figure in the two solvency ratios. Any multiple computations 2 further broken out to better explain sources of information Practice Exercise 12-II: Solvency Ratios