P17.3: Riverside Memorials primary financial statements are presented in exhibits 17.1, 17.2 and 17.3.
- Calculate Riversides financial ratios for 2019. Assume that Riverside had $1,000,000 in lease payments and $1,400,000 in debt principal repayments in 2019.
- Interpret the ratios. Use both trend and comparative analysis. For the comparative analysis assume that the peer group average data presented in the book are valid for both 2019 and 2020.
Chapter 17: Financial Condition Analysis 6 $6,474 4,130 (1,102) (195) (438) 229 $9,008 EXHIBIT 17.1 Riverside Memorial Hospital: Statement of Cash Flows, Year Ended December 31, 2020 (in thousands) Cash flows from operating activities: Operating income Adjustments: Depreciation Increase in accounts receivable Increase in inventories Decrease in accounts payable Increase in accrued expenses Net cash flow from operations Cash flows from investing activities: Investment in property and equipment Investment in short-term securities Net cash flow from investing Cash flows from financing activities: Nonoperating income Repayment of long-term debt Repayment of notes payable Lease principal repayment Net cash flow from financing Net increase (decrease) in cash and equivalents Beginning cash and equivalents Ending cash and equivalents ($4,293) (2.000) ($6,293) $2,098 (2.150) (3,262) (323) (53.637) (5 832) 3,095 $2,263 The statement is organized into three main sections: (1) cash flows from operating activities, (2) cash flows from investing activities, and (3) cash flows from financing activities. In addition, there is a short section that reconciles the net cash flow reported on the statement with the change in cash reported on the balance sheet. In the statement, cash coming into the Gapenski's Healthcare Finance 2020 2019 $ 91,929 $103,174 5,232 3,644 $112,050 4,622 6,014 $102,565 KHIBIT 17.2 Riverside Memorial Revenues: Hospital: Net patient service revenue atement of Premium revenue Operations Other revenue (Income Total operating revenues atements). -ars Ended Expenses: cember 31, Nursing services - and 2019 Dietary services housands) General services Administrative services Employee health and welfare Malpractice insurance Depreciation $ 58,285 $ 56.752 5.424 13,198 4.718 11,655 11,585 10.705 11,427 10,250 1,320 1,204 4,025 Interest expense 4,130 1,542 1.521 Total expenses Operating income Nonoperating income $105.576 $ 6,474 2,098 $102,165 400 1,995 Net income $ 8,572 $ 2.395 Hospital. To aid interpretation, the ratios are compared with hospital per group average ratios. To assess their relative performance, many healthcare organizations compare their financial ratios with average or median values of ratios for similar organizations. For example, Optum annually publishes the Alma of Financial and Qocrati infor Note, though, generale age. ROA 2020 2019 using its a dollar inve $ 3.095 sures bot/ EXHIBIT 17.3 Riverside Memorial Hospital: Balance Sheets, December 31 2020 and 2019 (in thousands) margin, ar Assets: Cash and equivalents Short-term investments Net patient accounts receivable Inventories Total current assets Gross property and equipment Accumulated depreciation Net property and equipment $ 2,263 4,000 21,840 3.177 $ 31,280 $145,158 25.160 $119.998 2.000 20.738 2.982 $ 28,815 $140,865 21.09 $119,835 Return on The ratio parity (R Total assets $ 151,278 Pe $188,650 Ri group ave Liabilities: Accounts payable Accrued expenses Notes payable Total current liabilities Long-term debt Finance lease obligations Total long-term liabilities Net assets (equity) $ 4,707 5,650 2,975 $ 13.332 $ 28.750 1,832 $ 30.582 $107.364 5.145 5.421 6,237 $ 16,803 $ 30,900 2.255 $ 33,055 $ 98,792 dollar of ROE is e use ROE supplied trustees its com R Total liabilities and net assets group av $ 151,278 $148,650 liter in tl of the ho
