| Instructions: Using the Income Statement and Balance Sheet below, calculate each of the ratios below in the yellow cell. Use formulas to show your work. | | | | | | | For each ratio, provide a brief ratio analysis, trend analysis and comparative analysis. |
| | | | | | | | Ratio Analysis: | Briefly explain what the ratio means |
| | | | | | | | Trend Analysis | Compare 2019 results with 2018 and explain if the ratios improved or declined and briefly why this could have occurred |
| | | | | | | | Comparative Analysis | Compare HPMC 2019 with industry averages and explain how HPMC did compared to other comparable hospitals. |
| INCOME STATEMENT - HIGH PLAINS MEDICAL CENTER | | | RATIOS |
| | 2019 | | | HPMC 2019 | HPMC 2018 | Industry Averages |
| Patient service revenue | $179,305 | | PROFITABILITY |
| Less: Provision for bad debts | 9,655 | | Total Margin | | 4.9% | 4.4% |
| Net patient service revenue | $169,650 |
| Premium revenue | 7,250 |
| Other revenue | 3,214 |
| Total operating revenue | $180,114 | | Operating Margin | | 3.0% | 1.6% |
| Nursing services | $85,620 |
| Dietary services | 8,373 |
| General services | 29,907 | | ROA (return on assets) | | 4.8% | 3.7% |
| Administrative services | 23,674 |
| Employee health and welfare | 13,375 |
| Malpractice insurance | 1,792 |
| Depreciation | 10,433 | | ROE (return on equity) | | 6.4% | 8.3% |
| Interest expense | 3,344 |
| Total expenses | $176,516 |
| Operating income | $3,598 |
| Nonoperating income | $3,725 | | LIQUIDITY RATIOS |
| Net income | $7,323 |
| | | | Current Ratio | | 2.0 | 1.9 |
| BALANCE SHEET - HIGH PLAINS MEDICAL CENTER |
| | 2019 |
| Cash and equivalents | $6,011 |
| Short-term investments | 4,997 | | Days Cash on Hand | | 23 | 29.9 |
| Net patient accts receivable | 30,134 |
| Inventories | 8,361 |
| Total current assets | $49,503 |
| Gross plant and equipment | 195,047 | | Debt Ratio | | 32.7% | 33.7% |
| Accumulated depreciation | 111,750 |
| Net plant and equipment | $83,297 |
| Total Assets | $132,800 |
| | | | Times Interest Earned | | 4.4 | 4.4 |
| Accounts payable | $10,015 |
| Accrued expenses | 5,986 |
| Notes payable | 5,250 |
| Total current liabilities | $21,251 | | ASSET MANAGEMENT RATIOS |
| Long-term debt | $32,956 |
| Capital lease obligations | 1,925 | | Fixed Asset Turnover | | 1.2 | 1.9 |
| Total long-term liabilities | $34,881 |
| Net assets (equity) | $76,668 |
| Total liabilities & equity | $132,800 |
| | | | Total Asset Turnover | | 0.9 | 0.8 |
| | | | Days in Patient AR | | 59.0 | 47.5 |
| | | | Average Age of Plant | | 9.9 | 11.5 |
dirk_22
HW5-1.xlsx
