Exhibit 4.16a Key Financial Ratios

Liquidity ratios Formulas

Current ratio Current Assets / Current Liabilities

Quick ratio (Cash + Marketable Securities + Net Receivables) / Current Liabilities

Acid test ratio (Cash + Marketable Securities) / Current Liabilities

Days in accounts receivable Net Patient Accounts Receivables / (Net Patient Revenues / 365)

Days cash on hand [(Cash + Marketable Securities + Long-Term Investments/Operating Expenses Depreciation and Amortization Expenses) / 365]

Average payment period, days Current Liabilities / [(Operating Expenses Depreciation and Amortization Expenses) / 365]

Revenues, expenses, and profitability Formulas

Operating revenues per adjusted discharge Total Operating Revenues / Adjusted Discharges

Operating expense per adjusted discharge Total Operating Expenses / Adjusted Discharges

Salary and benefit expense as percentage of operating expense Total Salary and Benefit Expense / Total Operating Expenses

Operating margin Operating Income / Total Operating Revenues

Nonoperating revenue ratio Nonoperating Revenues and Other Income / Total Operating Revenues

Return on total assets Excess of Revenues over Expenses / Total Assets

Return on net assets Excess of Revenues over Expenses / Net Assets

Activity Ratios Formulas

Total asset turnover ratio Total Operating Revenues / Total Assets

Net fixed assets turnover ratio Total Operating Revenues / Net Plant and Equipment

Age of plant ratio Accumulated Depreciation / Depreciation Expense

Capital Structure ratios Formulas

Long-term debt to net assets ratio Long-Term Debt / Net Assets

Net assets to total assets ratio Net Assets / Total Assets

Times interest earned ratio (Excess of Revenues over Expenses + Interest Expense) / Interest Expense

Debt service coverage ratio (Excess of Revenues over Expenses + Interest Expense + Depreciation and Amortization Expenses) / (Interest Expense + Principal Payments)

a Adjusted Discharges = (Total Gross Patient Revenue / Total Gross Inpatient Revenues) Total Discharges. b In for-profit health care organizations, calculated as Net Income / Total Assets.

c Called return on equity in for-profit health care organizations, and calculated as Net Income / Owners Equity. d Called long-term debt to equity in for-profit health care organizations, and calculated as Long-Term Debt / Owners Equity.

e Called equity to total assets in for-profit health care organizations, and calculated as Owners Equity / Total Assets.

f In for-profit health care organizations, calculated as (Net Income + Interest Expense) / Interest Expense.

g In for-profit health care organizations, calculated as (Net Income + Interest Expense + Depreciation and Amortization Expenses) / (Interest Expense + Principal Payments

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Question

Compare Spring Hill Community Hospitals liquidity, revenue, expense and profitability, activity, and capital structure ratios with its national industry benchmarks. Use a sheet for key financial ratios formula on page 186 in Financial Management of Healthcare Organizations 4^th ed Zelman, McCue, Glick& Thomas.

Note:The answer is needed not information for a book.

Ratio	20X1	20X0
Liquidity ratios
Current ratio	1.78	2.15
Quick ratio	1.29	1.55
Acid test ratio	0.18	0.35
Days in accounts receivable	82	60
Days cash on hand	60	100
Average payment period, days	40	50
Revenue, expense, and profitability ratios
Operating revenue per adjusted discharge	$7,900	$7,800
Operating expense per adjusted discharge	$8,200	$7,400
Salary and benefit as a percentage of total operating expense	55%	45%
Operating margin	(0.04)	0.05
Non-operating revenue	0.06	0.01
Return on total assets	0.02	0.03
Return on net assets	0.08	0.05
Activity ratios
Total asset turnover ratio	1.07	0.84
Fixed asset turnover ratio	2.70	1.46
Age of plant	9.26	11.08
Capital structure ratios
Long-term debt to equity	0.65	0.25
Net assets to total assets	0.35	0.52
Times interest earned	2.00	3.20
Debt service coverage ratio	2.50	3.70