Review the attached financial statements and calculate the business financial ratios for 2007 only. Note:the company had $18,000 in lease payments in 2007

Calculate the ratios using the example presented on the PPT notes, as well as in the book Chapter 13. Compare your solution with the industry average and provide analysis.

(Show Complete Work and Interpretation)

1.Profitability Ratios Margin Measures

a.Total margin= Net Income/Total Revenues =

b.Industry Avg. 6.8%

Example:

Total margin= Net Income/Total Revenues = 99,000/2,719,000 = .036 *100 = 3.6%

This percentage means the hospital makes 3.6 cents on every dollar of total revenues. The higher the number, the lower the expenses relative to revenues. This is lower than the average so maybe they could charge more for their services.

Industry Avg. 6.8%

c.Operating Margin = Operating Income/Total Operating Revenues

Industry Avg. 3.5%

d.Return on Assets (ROA) = Net income/Total assets =99,000/

Industry Avg. = 9.5%

e.Return On Equity (ROE) = Net income/Total equity =

Industry Avg. = 26.3%

- O X Chapter 13. Financial Condit X 5 5 Chapter 13. Financial Condit x 5 Fin Statement Data x 5 FIn Statement Data X FIn Statement Data X Financial Statements Data A X * Course Hero x Homework Help - Q&A fron x + C @ File | Y:/Downloads/Financial%20Ratios%20data-1.pdf : Apps Select your user typ. C Sign In or Sign Up |... W Citation Machine@:. ProQuest Ebook Ce... 5 Answers_CASE_11_S... MD Anderson Libra. 2008 2007 ASSETS Current Assets: Cash and cash equivalents $ 74 $ 41 Short-term investment 147 137 Accounts receivable, net 727 476 Inventories 27 22 Total current assets $ 975 $ 676 Investments $ 125 $ 100 Property and Equipment: Medical and office equipment $ 56 $ 54 Vehicles 70 47 Total $ 126 $ 101 Less: Accumulated depreciation (45) (24) Net property and equipment $ 81 $ 77 Total assets $1,181 $ 853 LIABILITIES AND EQUITY Current Liabilities: Notes payable $ 13 $ 13 Accounts payable 40 21 Accrued expenses 496 337 Total current liabilities $ 549 $ 371 Long-term debt 154 167 Total liabilities $ 703 $ 538 Equity (net assets) $ 478 $ 315 Total liabilities and equity $1,181 $ 853 ONE 9 w 9:43 PM 11/27/2020- O X X Homework Help - Q&A fron X + x 5 FIn Statement Data X FIn Statement Data X 5 Financial Statements Data A X * Course Hero Chapter 13. Financial Condit x 5 5 Chapter 13. Financial Condit x 3 Fin Statement Data - C @ File | Y:/Downloads/Financial%20Ratios%20data-1.pdf ProQuest Ebook Ce... 3 Answers_CASE_11_S.. MD Anderson Libra. i Apps Select your user typ. C Sign In or Sign Up |.. Citation Machine@:.. Statements of Operations December 31, 2008 and 2007 (in thousands) 2008 2007 Revenues: Net patient service revenue $4,042 $2,687 Other operating revenue 27 32 Total revenues $4,069 $ 2,719 Expenses: Salaries and benefits $ 2,714 $ 1,835 Supplies and drugs 1,042 675 Insurance 90 83 Provision for bad debts 46 21 Depreciation 21 15 Interest 16 19 Total expenses $3.929 $2,648 Operating income $ 140 $ 7 Nonoperating income: Contributions $ 10 $ 22 Investment income 13 Total nonoperating income $ 23 $ 28 Net income (excess of revenues over expenses) $ 163 $ 99 9:45 PM 11/27/2020 ONE 9 w- O X x + X Fin Statement Data Financial Statements Data A X Homework Help - Q&A fron x 5 FIn Statement Data *Course Hero Chapter 13. Financial Condit x 3 Chapter 13. Financial Condit x 3 Fin Statement Data x X @ File | Y:/Downloads/Financial%20Ratios%20data-1.pdf : Apps Select your user typ. C Sign In or Sign Up |.. W Citation Machine@:.. ProQuest Ebook Ce.. Answers_CASE_11_S... MD Anderson Libra. 3 / 3 Financial Statements Data Assignment #9.pdf Statements of Cash Flows December 31, 2008 and 2007 (in thousands) 2008 2007 Cash Flows from Operating Activities: Cash received from patient services $3.783 $2,590 Cash paid to employees and suppliers (3,684) (2,541) Interest paid (16) (14) Interest earned 13 6 Net cash from operations $ 96 $ 41 Cash Flows from Investing Activities: Purchase of property and equipment ($ 25 19 Net cash from investing activities ( 5 25 ) 19 Cash Flows from Financing Activities: Securities purchases ($ 35) Contributions 10 Repayment of long-term debt (13) Net cash from financing activities ($ Net increase (decrease) in cash and equivalents Cash and equivalents, beginning of year $ 41 + Cash and equivalents, end of year $ 74 9:45 PM 11/27/2020 ONE 9 w