question for shahimermaid
laqdia
berkelesm2-a1.xlsxSMH
| Beginning of year | Beginning of year | Beginning of year | End of year | ||||
| 2005 | 2006 | 2005 | 2006 | ||||
| Current asset | $202,008,600.00 | $228,168,000.00 | Liquidity | ||||
| Current Liability | $223,063,285.00 | $223,570,542.00 | Current Ratio | 0.906 | 1.021 | ||
| net patient revenue | $448,591,800.00 | $485,421,120.00 | Acid Test Ratio | 0.868 | 0.974 | ||
| net patient revenue per day | $1,229,018.63 | $1,329,920.88 | |||||
| Total Revenue | $510,069,325.00 | $510,069,325.00 | Operating Performance | ||||
| Total expense | $516,645,931.00 | $516,645,931.00 | Return on assets | -0.011 | -0.011 | ||
| excess of revenue over expenses | -$6,576,606.00 | -$6,576,606.00 | Operating Profit total and Percentage | 0.496 | 0.534 | ||
| Patient care revenue | $448,591,800.00 | $485,421,120.00 | Investment yield | 0.012 | 0.012 | ||
| Patient care expense | $226,106,126.00 | $226,106,126.00 | Return on equity | -0.0312 | -0.0304 | ||
| Investment Income | $1,892,925.00 | $1,892,925.00 | |||||
| Unrealized gains or losses | $0.00 | $0.00 | Management efficiency | ||||
| Unrestricted cash and investment | $155,132,000.00 | $158,866,000.00 | Days in accounts receivable | 52 | 52 | ||
| net assets | $210,876,715.00 | $216,386,500.00 | Days inventory on hand | 14 | 17 | ||
| Net accounts receivable | $63,330,160.00 | $69,552,000.00 | Days cash on hand | 117 | 119 | ||
| net inventory | $8,443,379.00 | $10,362,000.00 | |||||
| supply expense | $226,106,126.00 | $226,106,126.00 | |||||
| supply expense per day | $619,468.84 | $619,468.84 | |||||
| Total operating expense | $516,645,931.00 | $516,645,931.00 | |||||
| depreciation | $31,083,552.00 | $31,083,552.00 | |||||
| $16.73 | |||||||
| $0.33 |
NSMC
| Beginning of year | End of Year | Beginning of year | End of Year | ||||||
| 2009 | 2009 | 2009 | 2009 | ||||||
| Current asset | $2,232,068.00 | $2,779,467.00 | Liquidity | Liquidity | |||||
| Current Liability | $343,835.00 | $379,428.00 | Current Ratio | 6.49 | Current Ratio | 7.33 | |||
| net patient revenue | $87,179,871.00 | $87,860,173.00 | Acid Test Ratio | 6.49 | Acid Test Ratio | 7.33 | |||
| net patient revenue per day | $238,848.96 | $240,712.80 | |||||||
| Total Revenue | $88,626,940.00 | $88,626,940.00 | Operating Performance | Operating Performance | |||||
| Total expense | $49,114,939.00 | $49,114,939.00 | Return on assets | 15.16 | Return on assets | 13.40 | |||
| excess of revenue over expenses | $39,512,001.00 | $39,512,001.00 | Operating Profit total and Percentage | 1.00 | Operating Profit total and Percentage | 1.00 | |||
| Patient care revenue | $87,179,871.00 | $87,179,871.00 | Investment yield | -0.25 | Investment yield | -0.18 | |||
| Patient care expense | $186,021.00 | $186,021.00 | Return on equity | 18.67 | Return on equity | 13.40 | |||
| Investment Income | $538,695.00 | $538,695.00 | |||||||
| Unrealized gains or losses | -1037432 | -1037432 | Management efficiency | Management efficiency | |||||
| Unrestricted cash and investment | $1,982,575.00 | $2,753,846.00 | Days in accounts receivable | 1 | Days in accounts receivable | 1 | |||
| net assets | $2,115,806.00 | $2,949,409.00 | Days inventory on hand | 0 | Days inventory on hand | 0 | |||
| Net accounts receivable | $149,868.00 | $178,087.00 | Days cash on hand | 15 | Days cash on hand | 21 | |||
| net patient revenue | $87,179,871.00 | $87,179,871.00 | |||||||
| net patient revenue per day | $238,848.96 | $238,848.96 | |||||||
| net inventory | 0 | 0 | |||||||
| supply expense | $186,021.00 | $186,021.00 | |||||||
| supply expense per day | $509.65 | $509.65 | |||||||
| Total operating expense | $49,114,939.00 | $49,114,939.00 | |||||||
| depreciation | $150,760.00 | $150,760.00 |
Mayo
| Beginning of year | End of Year | Beginning of year | End of Year | ||||||
| 2009 | 2009 | 2009 | 2009 | ||||||
| Current asset | $255,750,843.00 | $262,139,460.00 | |||||||
| Current Liability | 39544292 | $32,861,671.00 | Liquidity | Liquidity | |||||
| net patient revenue | $757,704,326.00 | $757,704,326.00 | Current Ratio | 6.47 | Current Ratio | 7.98 | |||
| net patient revenue per day | $2,075,902.26 | $2,075,902.26 | Acid Test Ratio | 6.16 | Acid Test Ratio | 7.64 | |||
| Total Revenue | $811,369,827.00 | $811,369,827.00 | |||||||
| Total expense | $754,621,284.00 | $754,621,284.00 | Operating Performance | Operating Performance | |||||
| excess of revenue over expenses | $56,748,543.00 | $56,748,543.00 | Return on assets | 0.08 | Return on assets | 0.07 | |||
| Patient care revenue | $757,704,326.00 | $757,704,326.00 | Operating Profit total and Percentage | 0.9933291 | Operating Profit total and Percentage | 0.99332911292 | |||
| Patient care expense | $5,054,560.00 | $5,054,560.00 | Investment yield | 0.011 | Investment yield | 0.01 | |||
| Investment Income | $3,725,144.00 | $3,725,144.00 | Return on equity | 0.14 | Return on equity | 0.12 | |||
| Unrealized gains or losses | 0 | 0 | |||||||
| Unrestricted cash and investment | 343138720 | $390,271,717.00 | Management efficiency | Management efficiency | |||||
| net assets | 410147839 | $473,792,139.00 | Days in accounts receivable | 79 | Days in accounts receivable | 74 | |||
| Net accounts receivable | $164,257,519.00 | $154,379,758.00 | Days inventory on hand | 3 | Days inventory on hand | 30 | |||
| net inventory | $12,125,387.00 | $11,043,164.00 | Days cash on hand | 175 | Days cash on hand | 198 | |||
| supply expense | $136,136,185.00 | $135,442,441.00 | |||||||
| supply expense per day | $3,889,605.29 | $371,075.18 | |||||||
| Total operating expense | $754,621,284.00 | $663,430,105.00 | |||||||
| depreciation | $38,212,818.00 | $34,874,574.00 |
financial statement analysis
| Mayo hospital | SMH hospital | NSMC hospital | ||||||||||
| Beginning of year | End of Year | Beginning of year | End of year | Beginning of year | End of Year | |||||||
| 2009 | 2010 | 2005 | 2006 | 2009 | 2010 | |||||||
| Liquidity | Liquidity | |||||||||||
| Liquidity | Current Ratio | 0.906 | 1.021 | Current Ratio | 6.49 | 7.33 | ||||||
| Current Ratio | 6.47 | 7.98 | Acid Test Ratio | 0.868 | 0.974 | Acid Test Ratio | 6.49 | 7.33 | ||||
| Acid Test Ratio | 6.16 | 7.64 | ||||||||||
| Operating Performance | Operating Performance | |||||||||||
| Operating Performance | Return on assets | -0.011 | -0.011 | Return on assets | 15.16 | 13.40 | ||||||
| Return on assets | 0.08 | 0.07 | Operating Profit total and Percentage | 0.496 | 0.534 | Operating Profit total and Percentage | 1.00 | 1.00 | ||||
| Operating Profit total and Percentage | 0.99 | 0.99 | Investment yield | 0.012 | 0.012 | Investment yield | -0.25 | -0.18 | ||||
| Investment yield | 0.011 | 0.01 | Return on equity | -0.0312 | -0.0304 | Return on equity | 18.67 | 13.40 | ||||
| Return on equity | 0.14 | 0.12 | ||||||||||
| Management efficiency | Management efficiency | |||||||||||
| Management efficiency | Days in accounts receivable | 52 | 52 | Days in accounts receivable | 1 | 1 | ||||||
| Days in accounts receivable | 79 | 74 | Days inventory on hand | 14 | 17 | Days inventory on hand | 0 | 0 | ||||
| Days inventory on hand | 3 | 30 | Days cash on hand | 117 | 119 | Days cash on hand | 15 | 21 | ||||
| Days cash on hand | 175 | 198 | ||||||||||
| Liquidity ratio summary This analysis evaluates the performance of a fictitious not-for profit organization , SMH ;a not for profit organization called Mayo hospital and a for profit organization called North Shore Medical Center (NSMC). The liquidity ratio of NSMC and Mayo as indicated by the current ratio from both years show their improvement to meet current obligations with current assets. Similarily the acid-test ratio also indicates an increase in the availability of cash to pay off all of its debts. Specially, the fact that the acid-test ratio has a value more than one is an indication that the firm is able to pay its obligations without having to sell inventory. SMH on the other hand has an acid test ratio less than one which means that it s forced to sell inventory to maintain liquidity. Since inventory is the least liquid of all current assets, the acid-test ratio gives a better picture of a firm's ability to meet its current obligations than current ratio (Peavler, n.d). Operating performance summary The negative value for the return on assets for SMH hospital shows that it is not in favorable condition because it indicates that there is a loss for every dollar spent on an asset. The fact that there is no improvement from the year 2005 till 2006 is also another indication of inefficient use of the organization’s assets to generate revenue. The operating profit on the other hand shows a little improvement than the previous year which means that SMH is either working on its cost control or sales is increasing faster than costs relative to the previous year (Peavler, n.d). The operating profit total for both Mayo and NSMC hospital tell the amount of cash that is thrown off after most of the expenses are met (Peavler, n.d). A higher value of operating profit than a benchmark value indicates more generation of profit. On the other hand there is a decline in the return on assets (ROA) of both NSMC and Mayo hospital which is not a good sign as ROA speaks of how much a company is making a use out of its assets to generate profit. So a decline in ROA indicates that there is decrease in sales or poor cost control (CCDConsultants, n.d). The return on equity for SMH and Mayo hospitals is nearly zero whereas that of NSMC is higher. However this cannot signify that NSMC is better than SMH and Mayo because the amount of capital the company requires matters to the value of return on equity. As more amount of capital is needed the number of share holders increase resulting in low return on equity. In addition the fact that the later two are not for profit hospitals might make the return on equity ratio inapplicable as there are no shareholders present (CCDConsultants, n.d). Management efficiency summary According to the data in days in accounts receivables Mayo hospital shows a decrease in the days which shows that it has started converting its receivables in to cash more quickly than the previous year whereas SMH shows same number of days in both years. This is an indication that there has been no change in credit policy. NSMC on the other hand shows one day in accounts receivables which mean that the company does not give credit services. To determine the status of the average collection period, a company may compare it with its credit policy and measure its performance (Peavler, n.d). On the other hand, all of them show an increase in days cash on hand than their previous years. This is generally a good trend because the more the number of days the more a company is capable of paying its obligations. The number of days inventory indicate how much the company is well stocked to meet demands. Mayo hospital shows a great deal of difference between days inventory in the year 2009 and 2010. There is higher number of days inventory in the later year which may be an indication of a decrease in the demand for the product. On the contrary, NSMC shows a zero days inventory which means that the company is not keeping enough stocks to meet demand (BIZWIS, n.d). References BIZWIS. (n.d). Bizwis Consulting . Retrieved from Wizards of business analysis: http://www.bizwiz.ca/number_of_days_inventory.html CCDConsultants. (n.d). CCD Consultants. Retrieved from Return on Assets interpretation: http://www.ccdconsultants.com/documentation/financial-ratios/return-on-assets-interpretation.html Peavler, R. (n.d). What is operating profit margin ratio. Retrieved from About.com Business finance: http://bizfinance.about.com/od/financialratios/f/Operating_Profit_Margin.htm | ||||||||||||
