Perform a horizontal analysis and vertical analysis on the Statement of Operations (exhibit 1) with respect to: Net patient service revenue Total operating revenues Salary & benefits Total operating expenses Operating income Non-operating revenue Excess of revenues over expenses Perform a horizontal and vertical analysis on the Balance Sheet (exhibit 2) with respect to: Cash & cash equivalents Net patient receivables 0--Long-term investments Total assets Accounts payable Salaries payable Total current liabilities Bonds Payable Net assets Perform a ratio analysis on the 15 ratios for both years listed (exhibit 3) and compare them with the benchmarks Based on the calculations of horizontal, vertical, and ratio analysis, write your interpretative analysis in each of the four major ratio summaries (exhibit 4) Complete Overall Summary (end of exhibit 4) that highlights your major findings and recommendations to improve financial functioning of the hospital. Exhibit 1 Lilavati Hospital Statement of Operations (Income Statement) Statement of Operations (Horizontal & Vertical Analysis) for the Years ended December 31, 2021 and 2020 % of tot % of tot % Change Revenues 2020 Op.rev Op.rev 2021 2021-2020 $225,000 6.400 Net Patient Rev $210,000 Other Op. Rev 5.700 Tor Op. Rev 215.700 231,400 124,173 85,000 12.000 Expenses Salaries/Benefits 110,167 Supplies & other exp. 61,000 Depreciation 11,300 Interest 2.500 Total Op. Expenses 184,967 Operating Income 30,733 4.500 225,673 5,727 Non-Operating Revenue 7.500 8.500 Excess of Rev/Expenses $39,233 $13,227 Net Income $39,233 $13,277 Exhibit 2 Lilavati Hospital Balance Sheet December 31, 2021 and 2020 % of total % of Total %Change 2021 Assets 2020 Assets 2021-2020 Current Assets Cash & cash equivalents $40,500 $35,500 Net patient receivables 39,500 36,400 Inventory 3.800 4,000 Other current assets 5.200 Total current assets 90,300 81,100 6,500 175,500 Noncurrent Assets Plant, property, & equip. Gross plant, prop. & equip. 215,000 (less accumulated. Dep.) 165.000) (107.000) Net plant, property 150,000 68,500 Long-Term Investments 110,000 185.000 Total Assets $425,300 $259,600 Current Liabilities Accounts payable 8,500 Salaries payable 3,500 Notes Payable Total current liabilities 16,500 $14,500 4,500 4.300 23,300 4.500 Long-term liabilities Bonds payable 27.500 60.000 non 16,500 Long-term liabilities Bonds payable 27.500 Total-long term liabilities 27,500 60,000 60,000 Net Assets 342.000 215,600 Tot. liabilities & $425,300 $259,600 Net assets Exhibit 3 List of Ratios Assumption: Lilavati Hospital is a 323-bed facility with patient discharges of 26,000 for 2021 and 25,000 for 2020 Assumption: The debt principal payments for both years are $5,500 2021 2020 Ratio Benchmark 1) Current ratio 1.71 2) Quick ratio 1.42 3) Acid test 0.20 4) Days in account receivable 48 5) Days Cash on Hand 76 6) Operating revenue per discharge $7,121 7) Operating expense per discharge $6,819 8) Salary/benefit % of Op. Exp. 3) Acid test 0.20 4) Days in account receivable 48 5) Days Cash on Hand 76 6) Operating revenue per discharge $7,121 7) Operating expense per discharge $6,819 8) Salary/benefit % of Op. Exp. 38% 9) Operating margin 0.04 10) Non-Operating Revenue 0.07 11) Total Asset Turnover 1.03 12) Age of Plant 10.93 13) Long term debt to net assets 0.38 14) Times Interest Eamed 4.43 15) Debt Service Coverage Ratio 6.36 Exhibit 4 Ratio Summary Liquidity Summary 4.43 15) Debt Service Coverage Ratio 6.36 Exhibit 4 Ratio Summary Liquidity Summary Profitability Summary Activity Summary Capital Structure Summary Overall Summary Perform a horizontal analysis and vertical analysis on the Statement of Operations (exhibit 1) with respect to: Net patient service revenue Total operating revenues Salary & benefits Total operating expenses Operating income Non-operating revenue Excess of revenues over expenses Perform a horizontal and vertical analysis on the Balance Sheet (exhibit 2) with respect to: Cash & cash equivalents Net patient receivables 0--Long-term investments Total assets Accounts payable Salaries payable Total current liabilities Bonds Payable Net assets Perform a ratio analysis on the 15 ratios for both years listed (exhibit 3) and compare them with the benchmarks Based on the calculations of horizontal, vertical, and ratio analysis, write your interpretative analysis in each of the four major ratio summaries (exhibit 4) Complete Overall Summary (end of exhibit 4) that highlights your major findings and recommendations to improve financial functioning of the hospital. Exhibit 1 Lilavati Hospital Statement of Operations (Income Statement) Statement of Operations (Horizontal & Vertical Analysis) for the Years ended December 31, 2021 and 2020 % of tot % of tot % Change Revenues 2020 Op.rev Op.rev 2021 2021-2020 $225,000 6.400 Net Patient Rev $210,000 Other Op. Rev 5.700 Tor Op. Rev 215.700 231,400 124,173 85,000 12.000 Expenses Salaries/Benefits 110,167 Supplies & other exp. 61,000 Depreciation 11,300 Interest 2.500 Total Op. Expenses 184,967 Operating Income 30,733 4.500 225,673 5,727 Non-Operating Revenue 7.500 8.500 Excess of Rev/Expenses $39,233 $13,227 Net Income $39,233 $13,277 Exhibit 2 Lilavati Hospital Balance Sheet December 31, 2021 and 2020 % of total % of Total %Change 2021 Assets 2020 Assets 2021-2020 Current Assets Cash & cash equivalents $40,500 $35,500 Net patient receivables 39,500 36,400 Inventory 3.800 4,000 Other current assets 5.200 Total current assets 90,300 81,100 6,500 175,500 Noncurrent Assets Plant, property, & equip. Gross plant, prop. & equip. 215,000 (less accumulated. Dep.) 165.000) (107.000) Net plant, property 150,000 68,500 Long-Term Investments 110,000 185.000 Total Assets $425,300 $259,600 Current Liabilities Accounts payable 8,500 Salaries payable 3,500 Notes Payable Total current liabilities 16,500 $14,500 4,500 4.300 23,300 4.500 Long-term liabilities Bonds payable 27.500 60.000 non 16,500 Long-term liabilities Bonds payable 27.500 Total-long term liabilities 27,500 60,000 60,000 Net Assets 342.000 215,600 Tot. liabilities & $425,300 $259,600 Net assets Exhibit 3 List of Ratios Assumption: Lilavati Hospital is a 323-bed facility with patient discharges of 26,000 for 2021 and 25,000 for 2020 Assumption: The debt principal payments for both years are $5,500 2021 2020 Ratio Benchmark 1) Current ratio 1.71 2) Quick ratio 1.42 3) Acid test 0.20 4) Days in account receivable 48 5) Days Cash on Hand 76 6) Operating revenue per discharge $7,121 7) Operating expense per discharge $6,819 8) Salary/benefit % of Op. Exp. 3) Acid test 0.20 4) Days in account receivable 48 5) Days Cash on Hand 76 6) Operating revenue per discharge $7,121 7) Operating expense per discharge $6,819 8) Salary/benefit % of Op. Exp. 38% 9) Operating margin 0.04 10) Non-Operating Revenue 0.07 11) Total Asset Turnover 1.03 12) Age of Plant 10.93 13) Long term debt to net assets 0.38 14) Times Interest Eamed 4.43 15) Debt Service Coverage Ratio 6.36 Exhibit 4 Ratio Summary Liquidity Summary 4.43 15) Debt Service Coverage Ratio 6.36 Exhibit 4 Ratio Summary Liquidity Summary Profitability Summary Activity Summary Capital Structure Summary Overall Summary