Question:a.Theprofitability ratio -Total Margin. Total margin or the Profit margin is calculated as a ratio of Net income to Total revenue.

Total Margin = Total net income/Total revenue

Net operating income =

Net non-operating income =

Total net income =

Operating revenue =

Non-operating revenue =

Total revenue =

Total margin =

Total margin =

Industry average = 5.0%

In. lllvuaulludl 201 6 UNRESTRICTED NET ASSETS: Excess of revenue over expenses from consolidated operations 3 278,320 Change in net unrealized gains and losses on investments 9,202 Net assets released from restrictions for capital 6,395 Acquisition of noncontrolling interest (Note 1) (27,724) Distributions to noncontrolling interests (3,858) Pension and other postretirement net adjustments (10,094) Increase in unrestricted net assets 252,241 TEMPORARILY RESTRICTED NET ASSETS: Income on restricted investments 2,449 Contributions and grants 62,126 Change in net unrealized gains and losses on investments 3,451 Net assets released from restrictions for operations (34,214) Net assets released from restrictions for capital (6,395) Inherent contribution of acquired net assets 1,012 Annual spending appropriation 4,665 Increase (decrease) in temporarily restricted net assets 33,094 PERMANENTLY RESTRICTED NET ASSETS: Income on restricted investments 3,503 Contributions and other 7,908 Inherent contribution of acquired net assets 721 Annual spending appropriation (4,665) Increase in permanently restricted net assets 7,467 TOTAL INCREASE IN NET ASSETS 292,802 TOTAL NET ASSETSBeginning of year 1,547,580 TOTAL NET ASSETSEnd of year $ 1,840,382 See notes to consolidated nancial statements. 2015 $ 74,934 (30,779) 3,91 1 (2,134) (10,748) 35 184 2__ 1,746 32,959 (7,042) (35,696) (3,91 1) 4,45 1 1 7,493 ) 2,864 3,413 (4,451 ) 1 826 7_ 29,517 1518 063 _J_; $ 1,547,580 (Concluded) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from long-term obligations Redemption of long-term obligations Payments of nancing costs Proceeds from short-term borrowings Payments on shorttenn borrowings Payments of long-ten'n obligations Payments of capital lease payable Acquisition of noncontrolling interests Distributions to noncontrolling interests Income on restricted investments Restricted contributions and grants Net cash (used in) provided by nancing activities INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTSBeginning of year CASH AND CASH EQUIVALENTSEnd ofyear SUPPLEMENTAL DISCLOSURES 0F CASH FLOW INFORMATION: Cash paid during the year for interest, including amounts capitalized of$1,059 and $697 in 2016 and 2015, respectively Amounts accrued in property, plant, and equipmentnet Unsettled investment trades Unsettled investment purchases Cash paid for taxes 2016 $ 1,003,714 (1,025,180) (6,678) 2,000 (21,698) (19,040) (60) (15,000) (3,858) 5,952 70 034 9,814 k 1 139,566 688,878 M $ 30,071 $ 11828 1 $ 1,642 E16 1 l\" 2 999 $ 16,645 201 5 $ 2,700 (5:000) (24,450) (28) (2,134) 4,610 36 372 1 12,070 158,975 529,903 $ 688,878 $ 41,002 6 739 l 3 2,407 5464 $ 28,513 CASH FLOWS FROM OPERATING ACTIVITIES: increase in net assets Adjustments to reconcile increase in net assets to net cash provided by operating activities: Provision for bad debts Depreciation and amortization Pension and other postretirement net adjustments impairment charge Inherent contribution of net assets inherent contribution of restricted assets Loss on renancing Gain on sale of assets (Gain) loss on sale of disposal of assets Income on restricted investments Restricted contributions and grants Net realized and unrealized (gains) losses on investmentsother than trading securities Net realized and unrealized gains on investmentstrading Acquisition of noncontrolling interest Distributions to noncontrolling interests Change in assets and liabilities: Patient and health care premium receivables Deferred tax asset Other current assets Trading securities Joint venture investments Other assets Accounts payable Other liabilities Deferred tax liability Due to/from thirdparty payors Medical claims liability Malpractice and general liability Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property Proceeds from the sale or maturity of available for sale investments Purchase of available for sale investments Proceeds from the sale or maturity of trading securities Purchase of trading securities Dividends received from unconsolidated ailiates Cash acquired from business combinations Net cash used in investing activities 2016 $ 292,802 69,585 173,122 10,094 (240,269) (1,733) 58,742 (1,696) (471) (5,952) (70,034) (15,073) (I 1,568) 27,724 3,858 (66,467) (235) 4,668 (4,052) (2,566) 276 (1,658) 15,247 (15090) (47,134) 3,838) 168,282 (176,555) 445,319 (359,410) 65,827 (35,317) 41,234 18,902) 2015 $ 29,517 75,923 155,887 10,748 36,986 6,587 (4,610) (36,372) 20,008 2,134 (101,474) (834) (36,600) 15,819 (7,136) (8,689) 9,023 15,016 (2,274) 58,293 23,870 3,672) 258,100 (124,535) 394,724 (387,209) 5,825 111,195) gln thousands) 2016 2015 UNRESTRICTED REVENUE: Patient service revenue $ 3,020,85 1 $ 2,461,528 Less provision for bad debts 169,585) 175,923 ) Net patient service revenue 2,951,266 2,3 85,605 Health care premiums 2,413,214 2,3 98,762 Investment income 47,356 25,035 Other income 291,45 3 244,409 Total unrestricted revenue 5,703,289 5,053,811 EXPENSES: Salaries, wages, and employee benets 2,23 2,350 1,862,111 Health care provider expense 1,445,234 1,3 63,229 Supplies 846,826 734,382 Depreciation and amortization 173,122 155,887 General and other administrative 386,452 395,372 Other contracted services 288,161 220,894 Malpractice 29,656 33,095 Plant operations 53,5 83 46,957 Interest expense 38,541 37,554 Repairs and maintenance 64,980 51,018 Rent and lease 49,287 41,392 Total expenses 5,608,192 4,941,891 EXCESS OF REVENUE OVER EXPENSES BEFORE UNUSUAL ITEMS 95,097 111,920 UNUSUAL ITEMS: Inherent contribution of acquired net assets (Note 1) 240,269 - Gain on sale of Midwest assets (Note 1) 1,696 - Loss on renancing (Note 12) (58,742) - Impairment charge (Note 1) - 36,986) Total unusual items 183,223 1 36,986 ) EXCESS OF REVENUE OVER EXPENSES FROM CONSOLIDATED OPERATIONS 278,3 20 74,934 LESS EXCESS OF REVENUE OVER EXPENSES ATTRIBUTABLE T0 NONCONTROLLING INTERESTS 2,715 2,861 EXCESS OF REVENUE OVER EXPENSES ATTRIBUTABLE T0 HENRY FORD HEALTH SYSTEM 275,605 72,073 (Continued) CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2016 AND 2015 (In thousands) 2016 2015 2016 2015 ASSETS LIABILITIES CURRENT ASSETS: CURRENT LIABILITIES: Cash and cash equivalents $ 828,444 688,878 Short-term borrowings $ 24,167 $ 29,167 Short-term investments-available for sale, at fair value 272 1,751 Accounts payable 236, 159 193,380 Patient care receivables-net of allowances Due to third-party payors 32,059 28,252 of $124,399 and $137,309 in 2016 and Medical claims liability 194,324 173,417 2015, respectively 279,232 241,858 Other liabilities and accrued expenses 300, 736 257,171 Health care premium receivables 45,313 33,467 Current portion of capital lease payable 30 Due from third-party payors 18,657 4.454 Current portion of long-term obligations 15,967 24,702 Assets held for sale 28,258 Current portion of malpractice and general liability 37,261 33,953 Other current assets 212,881 167,228 Current portion of assets limited as to use 47,822 37,894 Total current liabilities 840,681 740,072 Total current assets 1,432,621 1,203,788 MALPRACTICE AND GENERAL LIABILITY 95,246 91,115 LONG-TERM INVESTMENTS 325,123 371,715 DEFERRED COMPENSATION, POSTRETIREMENT, AND OTHER LIABILITIES 448,522 378,097 ASSETS LIMITED TO USE 988,664 733,649 DEFERRED TAX LIABILITY 9.679 JOINT VENTURE INVESTMENTS 23,487 15,320 LONG-TERM OBLIGATIONS 1,029,037 835,116 DEFERRED TAX ASSET 1.947 1,712 LONG-TERM CAPITAL LEASE PAYABLE 4.308 4,153 INTANGIBLE AND OTHER ASSETS-Net 45,436 19,826 Total liabilities 2,417,794 2,058,232 GOODWILL-Net of accumulated amortization of $28,606 in 2016 and 2015 14, 199 14,128 NET ASSETS: Unrestricted PROPERTY, PLANT, AND EQUIPMENT-Net 1,426,699 1,245,674 Henry Ford Health System 1,593,299 1,335,025 Noncontrolling interests 3,135 9,168 Total unrestricted 1,596,434 1,344,193 Temporarily restricted 137,884 104,790 Permanently restricted 106,064 98,597 Total net assets 1,840,382 1,547,580 TOTAL $4,258, 176 $3,605,812 TOTAL $ 4,258, 176 $3,605,812 See notes to consolidated financial statements. . 3 -UNRESTRICTED NET ASSETS: Excess of revenue over expenses from consolidated operations Change in net unrealized gains and losses on investments Net assets released from restrictions for capital Acquisition of noncontrolling interest (Note 1) Distributions to noncontrolling interests Pension and other postretirement net adjustments Increase in unrestricted net assets TEMPORARILY RESTRICTED NET ASSETS: Income on restricted investments Contributions and grants Change in net unrealized gains and losses on investments Net assets released from restrictions for operations Net assets released from restrictions for capital Inherent contribution of acquired net assets Annual spending appropriation Increase (decrease) in temporarily restricted net assets PERMANENTLY RESTRICTED NET ASSETS: Income on restricted investments Contributions and other Inherent contribution of acquired net assets Annual spending appropriation Increase in permanently restricted net assets TOTAL INCREASE IN NET ASSETS TOTAL NET ASSETSBeginning of year TOTAL NET ASSETSEnd of year See notes to consolidated nancial statements. 201 6 $ 278,320 9,202 6,395 (27,724) (3,858) ( 10,094) 252,241 2,449 62,126 3,451 (34,214) (6,395) 1,012 4 665 ; 33 094 + 3,503 7,908 721 14,665) 7 467 ; 292,802 1 547 580 +2 3 1,840,382 2015 $ 74,934 (30,779) 3,91 1 (2,134) (10,748) 35 184 4'_ 1,746 32,959 (7,042) (35,696) (3,91 1) 4451 ; g 7,493 ) 2,864 3,413 (4,451) 1,826 29,517 1518063 _;}_ $ 1,547,580 (Concluded)