Question

Here is set of summary statistical reports and financial statements for a fictitious hospital. Using this...

Here is set of summary statistical reports and financial statements for a fictitious hospital. Using this information please calculate key ratios at the bottom.

Beach Memorial Hospital
Selected Financial and Statistical Information
Fiscal Year 2015

Statistical Information
Licensed beds 90
Staffed beds 70
Inpatient Admissions 4500
Inpatient Discharges 4600
Inpatient Days of Care 15500
Newborn Deliveries 500
Newborn Days of Care 1100
Emergency Room Visits 30000
Outpatient Surgery Visits 5000
Outpatient Diagnostic and Therapeutic Visits 50000
Case Mix Index 1.2
Medicare Case Mix Index 1.4

Balance Sheet
Cash & cash equivalents                             24000
Patient accounts receivable                        50000
Inventory                                                        7500
Prepaid expenses                                          1200
Total current assets                                    82700

Restricted assets                                         12000

Investments - Marketable securities          430000
Fixed assets, net                                         300500
Other assets 15000

Total assets                                                 840200

Current portion of long-term debt                    5000
Accounts payable                                          10000
Notes payable                                                 4000
Due to third parties                                         2500
Total current  liabilities                                   21500

Long-term debt, net of current portion         200000
Other long-term liabilities                               20000
Total liabilities                                             241500

Total net assets                                          598700
Total liabilites and net assets                      840200


Statement of Operations


Inpatient revenues                                 285000
Outpatient revenues                               175000
Gross patient services revenues            460000
Less deductions from revenue             -240000
Net patient services revenues               220000
Other Operating revenues                        50000
Total operating revenues                       270000

Operating expenses
Salaries                                                   225000
Supplies                                                    10500
Utilities & other                                          2500
Depreciation                                               5750
Interest                                                       3500
Bad debts                                                   4600
Other operating expenses                        10000
Total operating expenses                       261850

Operating income                                       8150

Nonoperating income                                    850

Excess of revenues over expenses            9000

Change in net assets                                   9000

From Statement of Cash Flows
Principal payment on long-term debt           5500

Calculate the following

Total asset turnover
Fixed asset turnover
Current asset turnover
Inventory turnover
Net asset financing
Long-term debt to capitalization
Debt service coverage
Cash flow to debt

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Homework Answers

Answer #1

Total asset turnover

= Sales Revenue / Total Assets

= 270000 / 840200

= 0.32

Fixed asset turnover

= Sales Revenue / Fixed Assets

= 270000 / 300500

= 0.8985

Current asset turnover

= Sales Revenue / Current Assets

= 270000 / 82700

=3.26

Inventory turnover

= Sales Revenue / Inventory

= 270000 / 7500

= 36

Net asset financing

=Net Assets / Total Assets

=598700 / 840 200

= 0.71

Long-term debt to capitalization

= Long term debt / Total capital

= 220000 / 598700

= 0.36

Debt service coverage

= Net Operating Income / Total Debt Service

= 8150 / 9000 ..........=Interest 3500 + Principal 5500 = 9000

= 0.91

Cash flow to debt

= Cash Flow from Operations / Total Debt

= 9000 + 5750 (Depreciation ) / 241500

= 0.061

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