Hello Tutors, I am having a hard time-need help to put this together, is there someone that can please please help? Below are the details:
I need help to use the financial statements to prepare the Financial Ratio Analysis of the Hospital selected (Methodist):
- Hospital:Houston Methodist (2019) - year by year financial audit in this link (what we are looking atonly is 2019)
https://projects.propublica.orgonprofits/organizations/741180155
Need to prepare a 2-3 year financial ratio analysis.I must calculate each of the ratios listed below:
Ratios listed (20 ratios total for all the four listed below based on the image/formulas for each ratio)
those are the ratios that have to be completed (please refer to image):
- Liquidity ratios
- Revenue, expense and profitability ratios
- Activity ratios
- Capital structure ratios
The image listed (Exhibit 4-16b..): The formulas that need to be used to complete each ratio listed above
Exhibit 4-16b Formulas for key financial ratios Liquidity ratios Formula 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] Revenue, expense, and profitability ratios Formula Operating revenue per adjusted discharge" Total Operating Revenue/ Adjusted Discharges Operating expense per adjusted discharge" Total Operating Expense / Adjusted Discharges Salary expense as a percentage of operating expense Total Salary Expense / Total Operating Expenses Operating margin Operating Income / Total Operating Revenues Non-operating revenue ratio Non-operating 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 Formula 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 Formula Long-term debt to net assets ration Long-Term Debt / Net Assets Net assets to total assets ration Net Assets / Total Assets Times interest earned ratio' (Excess of Revenues Over Expenses + Interest Expense) / Interest Expense Debt service coverage ratios (Excess of Revenues Over Expenses + Interest Expense + Depreciation and Amortization Expenses) / (Interest Expense + Principal Payments) Adjusted discharges = (total gross patient revenue/ total gross Inpatient revenues) x total discharges. In for-profit health care organizations, caluclated as: net Income / total assets. Called the return on equity in for-profit health care organizations, and calculated as: net Income / owners' equity. "Called long-term debt to equity In for-profit health care organizations and calculated as: long-term debt / owners' equity .Called equity to total assets In for-profit health care organizations and calculated as: owners' equity / total assets. "In for-profit health care organizations, calculated as: (net Income + Interest expense) / Interest expense. " In for-profit health care organizations, calculated as: (net Income + Interest expense + depreciation & amortization expenses) / (interest expense + principal payments)
