Hospital Financial Condition Analysis

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Balance Sheet

Financial Statement Case #4 Financial Statement Case #4 Financial Statement Case #4
Evans Memorial Hospital; Claxton, GA Evans Memorial Hospital; Claxton, GA Evans Memorial Hospital; Claxton, GA
Balance Sheet Balance Sheet Balance Sheet
September 30, 2016 through 2012 Common Size Analysis Horizontal Analysis (Base year 2012)
(in thousands)
2016 2015 2014 2013 2012 2016 2015 2014 2013 2012 2016 2015 2014 2013 2012
Assets
Current assets
Cash and Cash Equivalents $ 245 $ 548 $ 830 $ 2,657 $ 4,459 2.82% 6.03% 7.69% 19.80% 28.59% -94.51% -87.71% -81.39% -40.41% 0.00%
Marketable Securities $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 0.00% 0.00% 0.00% 0.00% 0.00% ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Current portion of assets limited as to use 336 330 299 290 491 3.87% 3.63% 2.77% 2.16% 3.15% -31.57% -32.79% -39.10% -40.94% 0.00%
Patient accounts receivable, net 1,622 1,442 1,678 1,940 2,444 18.69% 15.87% 15.55% 14.46% 15.67% -33.63% -41.00% -31.34% -20.62% 0.00%
Other receivables - 0 - 0 - 0 - 0 - 0 0.00% 0.00% 0.00% 0.00% 0.00% ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Inventory 103 151 147 125 122 1.19% 1.66% 1.36% 0.93% 0.78% -15.57% 23.77% 20.49% 2.46% 0.00%
Prepaid expenses 180 365 705 849 (114) 2.07% 4.02% 6.53% 6.33% -0.73% -257.89% -420.18% -718.42% -844.74% 0.00%
Total current assets $ 2,486 $ 2,836 $ 3,659 $ 5,861 $ 7,402 28.65% 31.20% 33.90% 43.69% 47.45% -66.41% -61.69% -50.57% -20.82% 0.00%
Assets whose use is limited 1,149 958 1,092 1,069 1,037 13.24% 10.54% 10.12% 7.97% 6.65% 10.80% -7.62% 5.30% 3.09% 0.00%
Property and equipment, net* 4,762 4,993 5,694 6,090 6,708 54.88% 54.93% 52.76% 45.39% 43.01% -29.01% -25.57% -15.12% -9.21% 0.00%
Other long-term assets 280 302 348 396 451 3.23% 3.32% 3.22% 2.95% 2.89% -37.92% -33.04% -22.84% -12.20% 0.00%
Total assets $ 8,677 $ 9,089 $ 10,793 $ 13,416 $ 15,598 100.00% 100.00% 100.00% 100.00% 100.00% -44.37% -41.73% -30.81% -13.99% 0.00%
Liabilites and Net Assets
Current liabiliites
Current portion of long-term debt $ 415 $ 304 291 278 266 4.78% 3.34% 2.70% 2.07% 1.71% 56.02% 14.29% 9.40% 4.51% 0.00%
Accounts payable 1,042 975 419 273 257 12.01% 10.73% 3.88% 2.03% 1.65% 305.45% 279.38% 63.04% 6.23% 0.00%
Accrued salaries and benefits - 0 - 0 0.00% 0.00% 0.00% 0.00% 0.00% ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Other accrued expenses 692 716 695 718 1,383 7.98% 7.88% 6.44% 5.35% 8.87% -49.96% -48.23% -49.75% -48.08% 0.00%
Other current liabilities 226 178 4,221 658 398 2.60% 1.96% 39.11% 4.90% 2.55% -43.22% -55.28% 960.55% 65.33% 0.00%
Total current liabilities 2,375 2,173 2,046 1,927 2,304 27.37% 23.91% 18.96% 14.36% 14.77% 3.08% -5.69% -11.20% -16.36% 0.00%
Long-term debt, net of current portion 5,997 6,072 6,388 6,626 6,904 69.11% 66.81% 59.19% 49.39% 44.26% -13.14% -12.05% -7.47% -4.03% 0.00%
Other long-term liabilities 159 177 188 199 212 1.83% 1.95% 1.74% 1.48% 1.36% -25.00% -16.51% -11.32% -6.13% 0.00%
Total liabilities 8,531 8,422 8,622 8,752 9,420 98.32% 92.66% 79.89% 65.24% 60.39% -9.44% -10.59% -8.47% -7.09% 0.00%
Net assets
Unresticted 119 615 2,119 4,612 6,126 1.37% 6.77% 19.63% 34.38% 39.27% -98.06% -89.96% -65.41% -24.71% 0.00%
Temporarily restricted 17 - 0 - 0 - 0 - 0 0.20% 0.00% 0.00% 0.00% 0.00% ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Permanently restricted 10 52 52 52 52 0.12% 0.57% 0.48% 0.39% 0.33% -80.77% 0.00% 0.00% 0.00% 0.00%
Total net assets 146 667 2,171 4,664 6,178 1.68% 7.34% 20.11% 34.76% 39.61% -97.64% -89.20% -64.86% -24.51% 0.00%
Total liabilities and net assets 8,677 9,089 10,793 13,416 15,598 100.00% 100.00% 100.00% 100.00% 100.00% -44.37% -41.73% -30.81% -13.99% 0.00%
* Accumulated deprecitation $ 15,619 $ 14,876 $ 14,122 $ 13,354 $ 12,506 180.00% 163.67% 130.84% 99.54% 80.18% 24.89% 18.95% 12.92% 6.78% 0.00%

Income Statement

Financial Statement Case #4 Financial Statement Case #4 Financial Statement Case #4
Evans Memorial Hospital; Claxton, GA Evans Memorial Hospital; Claxton, GA Evans Memorial Hospital; Claxton, GA
Statement of Operations Statement of Operations Statement of Operations
Years Ended September 30, 2016 through 2012
(in thousands) Common Size Analysis Horizontal Analysis (Base year 2012)
2016 2015 2014 2013 2012 2016 2015 2014 2013 2012 2016 2015 2014 2013 2012
Unrestricted revenues
Patient service revenue (net of contractual allowance and discounts) $ 14,083 $ 13,982 $ 14,389 $ 16,038 $ 17,878 126.01% 119.78% 117.63% 114.07% 106.75% -21.23% -21.79% -19.52% -10.29% 0.00%
Provision for bad debts (3,351) (2,908) (3,192) (3,371) (3,023) -29.98% -24.91% -26.10% -23.98% -18.05% 10.85% -3.80% 5.59% 11.51% 0.00%
Net patient service revenue 10,732 11,074 11,197 12,667 14,855 96.03% 94.87% 91.54% 90.09% 88.70% -27.75% -25.45% -24.62% -14.73% 0.00%
other revenue 444 599 1,035 1,393 1,892 3.97% 5.13% 8.46% 9.91% 11.30% -76.53% -68.34% -45.30% -26.37% 0.00%
Total operating revenues 11,176 11,673 12,232 14,060 16,747 100.00% 100.00% 100.00% 100.00% 100.00% -33.27% -30.30% -26.96% -16.04% 0.00%
Expenses
Salaries and wages 5,641 5,931 7,169 7,881 8,470 50.47% 50.81% 58.61% 56.05% 50.58% -33.40% -29.98% -15.36% -6.95% 0.00%
Employee benefits 1,075 1,023 1,119 1,332 976 9.62% 8.76% 9.15% 9.47% 5.83% 10.14% 4.82% 14.65% 36.48% 0.00%
Purchased services 2,089 2,630 2,260 1,917 1,853 18.69% 22.53% 18.48% 13.63% 11.06% 12.74% 41.93% 21.96% 3.45% 0.00%
Supplies and drugs 2,804 2,862 3,114 3,336 3,501 25.09% 24.52% 25.46% 23.73% 20.91% -19.91% -18.25% -11.05% -4.71% 0.00%
Repairs and maintenance - 0 - 0 - 0 - 0 - 0
Insurance and utilities - 0 - 0 - 0 - 0 - 0
Depreciation 765 776 792 889 1,178 6.85% 6.65% 6.47% 6.32% 7.03% -35.06% -34.13% -32.77% -24.53% 0.00%
Interest 271 280 315 296 350 2.42% 2.40% 2.58% 2.11% 2.09% -22.57% -20.00% -10.00% -15.43% 0.00%
Other expenses - 0 - 0 - 0 - 0 - 0
Total operating expenses 12,645 13,502 14,769 15,651 16,328 113.14% 115.67% 120.74% 111.32% 97.50% -22.56% -17.31% -9.55% -4.15% 0.00%
Operating income (loss) (1,469) (1,829) (2,537) (1,591) 419 -13.14% -15.67% -20.74% -11.32% 2.50% -450.60% -536.52% -705.49% -479.71% 0.00%
Total non-operating revenue (expense): 723 32 43 76 34 6.47% 0.27% 0.35% 0.54% 0.20% 2026.47% -5.88% 26.47% 123.53% 0.00%
0.00% 0.00% 0.00% 0.00% 0.00% ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Excess (deficit) of revenues over (under) expenses (746) (1,797) (2,494) (1,515) 453 -6.68% -15.39% -20.39% -10.78% 2.70% -264.68% -496.69% -650.55% -434.44% 0.00%

Statement of Cash Flows

Financial Statement Case #4
Evans Memorial Hospital; Claxton, GA
Statement of Cash Flows
Years Ended September 30, 2016 through 2012
(in thousands)
2016 2015 2014 2013 2012
Net cash provided by (used in) operating activities (OCF) 121 (320) (1,198) (1,278) 1,565
Net cash provided by (used in) investing activities (ICF) (294) 49 (363) (258) 7,418
Net cash provided by (used in) financing activities (FCF) (129) (10) (266) (266) (5,189)
Net increase (decrease) in cash and cash equivalents (302) (281) (1,827) (1,802) 3,794
Cash and cash equivalents, beginning of year 548 830 2,657 4,459 665
Cash and cash equivalents, end of year 245 548 830 2,657 4,459
Pattern Analysis (Record the pattern number from below for each year)
Statement of Cash Flows - Pattern Analysis
Pattern # OCF ICF FCF Analysis
1 + + + Organization is using cash generated from operations, from sale of assets, and from financing to build up piles of cash--very liquid company--possibly looking for acquisition
2 + - - Organization is using cash flows generated from operations to buy fixed assets and to pay down debt
3 + + - Organization is using cash from operations and from sale of fixed assets to pay down debt
4 + - + Organization is using cash from operations and from borrowing to expand
5 - + + Organization's operating cash flow problems are covered by sale of fixed assets and borrowings
6 - - + Organization is growing rapidly, but has shortfalls in cash flows from operations and from purchases of fixed assets financed by long-term debt
7 - + - Organization is financing operating cash flow shortages and payments to creditors via sale of fixed assets
8 - - - Organization is using cash reserves to finance operations shortfall and pay long-term creditors

Ratio Analysis

Financial Statement Case #4
Evans Memorial Hospital; Claxton, GA
Ratio Analysis
Years Ended September 30, 2016 through 2012
2016 2015 2014 2013 2012
Profitability Ratios:
Operating margin (%) Operating Income(Loss)/Total operating revenue -13.14% -15.67% -20.74% -11.32% 2.50%
Total margin (%) Excess (deficit) of revenues over (under) expenses/total operating revenue -6.68% -15.39% -20.39% -10.78% 2.70%
Return on assets (%) Excess (deficit) of revenues over (under) expenses/Total assets -8.60% -19.77% -23.11% -11.29% 2.90%
Return on net assets (%) Excess (deficit) of revenues over (under) expenses/Total net assets -510.96% -269.42% -114.88% -32.48% 7.33%
Return on investment (%) (Excess (deficit) of revenues over (under) expenses + depreciation + interest)/Total assets 3.34% -8.15% -12.85% -2.46% 12.70%
Cash flow margin (%) Cash flow from operating activity/Total operating revenue 1.08% -2.74% -9.79% -9.09% 9.34%
Cash return on assets (%) Cash flow from operating activity/Total assets 1.39% -3.52% -11.10% -9.53% 10.03%
Growth rate in equity (%) (End-of-year net assets - beginning-of-year net assets)/Beginning-of-year net assets -97.64% ERROR:#DIV/0! 12902480.14% 6355386.66% 3071256.70%
Liquidity Ratios:
Current ratio (x) Total current assets/Total current liabilities 1.05 1.31 1.79 3.04 3.21
Quick ratio (x) (Total current assets - inventory)/Total current liabilities 1.00 1.24 1.72 2.98 3.16
Acid test ratio (x) (Cash and cash equivalents + Marketable securities)/Total current liabilities 0.10 0.25 0.41 1.38 1.94
Days cash on hand (days) (Cash and cash equivalents + Marketable securities)/((Total operating expense - depreciation)/365) 7.53 15.72 21.67 65.70 107.43
Average payment period (days) Total current liabilities/((Total operating expenses - Depreciation))/365 0.00 0.00 0.00 0.00 0.00
Days in accounts receivable (days) Patient accounts receivable, net/(Net patient service revenue/365) 0.00 0.00 0.00 0.00 0.00
Operating cash flow ratio (%) Cash flow from operating activities/Total current liabilities 5.09% -14.73% -58.55% -66.32% 67.93%
Debt Management Ratios:
Debt ratio (%) Total liabilities/Total assets 98.32% 92.66% 79.89% 65.24% 60.39%
Debt service coverage (x) (Excess (deficit) of revenues over (under) expenses + depreciation + interest)/(Current portion of long-term debt + interest) 0.42 -1.27 -2.29 -0.57 3.22
Times interest earned (x) (Operating income (loss) - Interest)/Interest -6.42 -7.53 -9.05 -6.38 0.20
Cash interest coverage (x) (Cash flows from operating activities + Interest)/Interest 1.45 -0.14 -2.80 -3.32 5.47
Asset Management Ratios:
Total asset turnover (x) Total operating revenue/Total assets 1.29 1.28 1.13 1.05 1.07
Fixed asset turnover (x) Total operating revenue/Property and equipment, net 2.35 2.34 2.15 2.31 2.50
Current asset turnover (x) Total operating revenue/Total current assets 4.50 4.12 3.34 2.40 2.26
Average collection period (days) Net patient accounts receivable/(net patient service revenue/365) 55.16 47.53 54.70 55.90 60.05
Dupont Analysis
Total margin (%) From above
Total asset turnover (x) From above
Equity multiplier (x) Total assets/Total net assets 59.43 13.63 4.97 2.88 2.52
Dupont -- ROE (%) Total margin x Total asset turnover x Equity multiplier (HINT: Should match ROE from above)
Other
Average Age of Plant (years) Accumulated depreciation/Depreciation expense 20.42 19.17 17.83 15.02 10.62