Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You have been hired as a Financial Manager for Bokamoso Hospital and your team is working on an independent assessment of a Dinokwe Hospital whom

You have been hired as a Financial Manager for Bokamoso Hospital and your team is working on an independent assessment of a Dinokwe Hospital whom the shareholders are considering to invest in. Dinokwe hospital is a hospital that specialises in Ear Nose and Throat ENT treatments and surgery. Your assistant has provided you with the following data for Dinokwe Hospital and their industry. Ratio 1999 1998 1997 1999- Industry Average Long-term debt 0.45 0.40 0.35 0.35 Inventory Turnover 62.65 42.42 32.25 53.25 Depreciation/Total Assets 0.25 0.014 0.018 0.015 Days'sales in receivables 113 98 94 130.25 Debt to Equity 0.75 0.85 0.90 0.88 Profit Margin 0.082 0.07 0.06 0.075 Total Asset Turnover 0.54 0.65 0.70 0.40 Quick Ratio 1.028 1.03 1.029 1.031 Current Ratio 1.33 1.21 1.15 1.25 Times Interest Earned 0.9 4.375 4.45 4.65 Equity Multiplier 1.75 1.85 1.90 1.88 a. In the annual report to the shareholders, the CEO of Dinokwe Hospital, "1997 was a good year for the hospital with respect to our ability to meet our short-term obligations. We had higher liquidity largely due to an increase in highly liquid current assets (cash, account receivables and short-term marketable securities)." Is the CEO correct? Explain and use only relevant information in your analysi

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Management Accounting A User Perspective

Authors: Michael L Werner, Kumen H Jones

2nd Edition

0130327506, 9780130327505

More Books

Students also viewed these Accounting questions

Question

(c) Find the equation of the tangent line to y g(x) at x=3. f(x)

Answered: 1 week ago

Question

5. How can I help others in the network achieve their goals?

Answered: 1 week ago