Ratio analysis. The statement of operations and balance sheet for Longwood Community Hospital for the years ended 20X0 and 20X1 are shown in Exhibits 4.19a and 4.19b. Compute the following ratios for both years: current, acid test, days in accounts receivable, average payment period, longterm debt to net assets, net assets to total assets, total asset turnover, fixed asset turnover, operating revenue per adjusted discharge, operating expense per adjusted discharge, salary and benefit expense as a percentage of total operating expense, return on total assets, and operating margin. After calculating the ratios, comment on Longwoods liquidity; efficient use of assets or activity ratios; revenue, expense, and profitability; and capital structure relative to its industry benchmarks for its respective bed size (listed in Exhibit 4.16a). Cite at least two meaningful ratios per category. Assume for this analysis that Longwood is a 350bed facility and its adjusted discharges were 9,500 for 20X0 and 9,300 for 20X1.

EXHIBIT 4.19b BALANCE SHEET FOR LONGWOOD COMMUNITY HOSPITAL Longwood Community Hospital Balance Sheet (in thousands) for the Years Ended December 31, 20X1 and 20Xo 20X1 20Xo $9,500 $7,500 13,500 15,000 3,400 .3,300 27,900 24,300 78,000 (20,000) 74,000 (13,000) 61,000 58,000 Current assets Cash and cash equivalents Net patient receivables Prepaid expenses Total current assets Noncurrent assets Plant, property, and equipment Gross plant, property, and equipment (less accumulated depreciation) Net plant, property, and equipment Construction in progress Total assets Current liabilities Accounts payable Salaries payable Total current liabilities Long-term liabilities Bonds payable Total long-term liabilities Net assets Total liabilities and net assets 12,000 11,500 $96,800 $97,900 $450 8,200 $850 9,400 8,650 10,250 55,000 55,000 58,000 58,000 28,550 $96,800 34,250 $97,900 EXHIBIT 4.19a STATEMENT OF OPERATIONS FOR LONGWOOD COMMUNITY HOSPITAL Longwood Community Hospital Statement of Operations (in thousands) for the Years Ended December 31, 20X1 and 20Xo 20X1 20Xo Revenues $92,000 $91,000 Net patient service revenue Other revenue Total operating revenues 3,000 2,500 95,000 93,500 42,000 Expenses Salaries and benefits Supplies & other expenses Depreciation Total operating expenses 48,000 34,000 34,000 14,000 13,000 90,000 95,000 Operating income 5,000 (1,500) (1,500) Excess of revenues over expenses 5,000 Increase (decrease) in net assets $5,000 ($1,500)