The Cash Flow Statement

Question 5: Calculate cash flow from operating activities using the following information:

Cash sales: $10,000

Cash received from prior credit sales: $8,000

Rent paid: $3,000

Inventory purchased: $6,000

Wages paid: $5,000

Question 6: Find an income statement (called a statement of revenue and expense in your book) from a hospital within the last 5 years. They are publicly available. If you have trouble, contact me.

6a. Review what an income statement looks like and contains in real life. Complete the following ratios as outlined on page 128:

• Current ratio
• Quick ratio
• Days Cash on Hand
• Days Receivables
• Operating margin
• Return on total assets

6b. After completing the ratios, state in your own words what this means about the OVERALL financial health of the hospital, you do not need to state which each ratio specifically means.

For example, the operating margin is negative, with high days in receivables and only 3 days cash on hand. This hospital is losing money, not collecting what is owed to them fast enough and does not have enough cash to cover emergency expenses.this appears to show a poor financial performance.