Question

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.

INCOME STATEMENT - HIGH PLAINS MEDICAL CENTER
	2019
Patient service revenue	$179,305
Less: Provision for bad debts	9,655
Net patient service revenue	$169,650
Premium revenue	7,250
Other revenue	3,214
Total operating revenue	$180,114
Nursing services	$85,620
Dietary services	8,373
General services	29,907
Administrative services	23,674
Employee health and welfare	13,375
Malpractice insurance	1,792
Depreciation	10,433
Interest expense	3,344
Total expenses	$176,516
Operating income	$3,598
Nonoperating income	$3,725
Net income	$7,323
BALANCE SHEET - HIGH PLAINS MEDICAL CENTER
	2019
Cash and equivalents	$6,011
Short-term investments	4,997
Net patient accts receivable	30,134
Inventories	8,361
Total current assets	$49,503
Gross plant and equipment	195,047
Accumulated depreciation	111,750
Net plant and equipment	$83,297
Total Assets	$132,800
Accounts payable	$10,015
Accrued expenses	5,986
Notes payable	5,250
Total current liabilities	$21,251
Long-term debt	$32,956
Capital lease obligations	1,925
Total long-term liabilities	$34,881
Net assets (equity)	$76,668
Total liabilities & equity	$132,800

LIQUIDITY RATIOS
Current Ratio		2.0	1.9
Days Cash on Hand		23	29.9
Debt Ratio		32.7%	33.7%
Times Interest Earned		4.4	4.4

Answer 1