Refer to Megatropolis Hospitals financial statements below for calculating the ratios requested in problems 1 to 6.

Megatropolis Hospital

Statement of Operations

For the Year Ended December 31, 2010

Revenues, Gains, Other Support

Net patient service revenue $ 1,500,000

Other revenue 200,000

Total Revenue 1,700,000

Expenses

Nursing Services 1,200,000

Administrative Services 200,000

Depreciation 100,000

Other Expenses 50,000

Total Expenses 1,550,000

Operating Income 150,000

Investment Income 50,000

Excess of revenues over expenses 200,000

Increase in Unrestricted Net Assets $ 200,000

Megatropolis Hospital

Balance Sheet

As of December 31, 2010 (2009 omitted)

Assets

Current Assets

Cash and cash equivalents $ 50,000

Net patient receivables 350,000

Total Current Assets 400,000

Properties and Equipment

Gross properties and equipment $ 900,000

Less accumulated depreciation 475,000

Net Properties and Equipment 425,000

Total Assets $ 825,000

Liabilities and Net Assets

Current Liabilities

Accounts Payable 200,000

Salaries Payable 50,000

Total Current Liabilities 250,000

Notes Payable 200,000

Unrestricted Net Assets 375,000

Total Liabilities and Net Assets $ 825,000

1. What is Megatropolis Hospitals operating margin?

2. What is Megatropolis Hospitals days in accounts receivable?

3. What is Megatropolis Hospitals long-term debt to net assets ratio?

4. What is Megatropolis Hospitals age of plant?

5. What is Megatropolis Hospitals fixed asset turnover ratio?

6. What is Megatropolis Hospitals days cash on hand?

Please show all work for each question with equations used to find answers!

Formulas to use:

Ratio analysis formulas:

Return on equity = net income / equity or net assets

Total asset turnover = revenue / assets

Operating margin = operating income / total operating revenue

Days in Accounts Receivables = net patient receivables/ (Net patient service revenue /365)

Long term to debt asset ratio = notes payable / unrestricted net assets

Age of plant = less accumulated depreciation / depreciation

Fixed asset turnover ration = total revenue / net property and equipment

Days cash on hand = (cash and cash equivalents /(total expense -depreciation)/365)