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 receiv- able, average payment period, long-term debt to net assets, net assets to total assets, total asset turnover, fixed asset turnover, operating revenue per adjusted discharge, oper- ating 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 Longwood’s 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 350-bed facility and its adjusted discharges were 5,500 for 20X0 and 5,400 for 20X1.

Revenues	20x1	20x0
Net patient service revenue	54,000	$53,000
Other revenue	1,000	500
Total operating revenues	55,000	53,500
Expenses
Salaries and benefits	23,000	22,000
Supplies and other expenses	20,000	23,000
Depreciation	10,000	9,000
Total operating expenses	53,000	54,000
Operating income	2,000	(500)
Excess of revenues over expenses	2,000	(500)
Increase (decrease) in net assets	$2,000	($500)

Exhibit 4.19b Balance Sheet for Longwood Community Hospital

Particulars	20x1	20x0
Current Assets
Cash and Cash Equivalents	$6,000	$4,000
Net patient receivables	10,000	8,500
Prepaid expenses	1,400	1,300
Total current assets	17,400	13,800
Noncurrent assets
Plants, property, and Equipment
Gross plant, property &Equip.	27,000	24,000
(Less accumulated depreciation)	(1,500)	(1,300)
Net plant, property, and equip.	25,500	22,700
Construction in progress	1,000	4,000
Total assets	$43,900	$40,500
Current liabilities
Account payable	$500	$750
Salaries payable	7,800	9,000
Total current liabilities	8,300	9,750
Long-term liabilities
Bond payable	9,000	8,000
Total long-term liabilities	9,000	8,000
Net Assets	26,600	22,750
Total liabilities and net assets	$43,900	$40,500