Compute the following ratios from Arcadia Hospital’s 2005 financial statements:…

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? Resource: Table 4-2 on p. 71 of the text

? Due Date: Day 4 [Individual forum]

? Compute the following ratios from Arcadia Hospital’s 2005 financial statements:

o Current ratio

o Total asset

? Compare these ratios with the 1999 median for all U.S. acute care hospitals listed in Table 4-2.

? Answer the following and explain your answer: What was the financial status of Arcadia in 2005?

? Compute the following ratios from Arcadia Hospital’s 2005 financial statements:

o Asset/equity

o Long-term debt/equity

o Total margin

? Explain whether the ratios are leverage or profitability ratios. If a leverage ratio, is it coverage or

capital structure? What is the difference between the two? If a profitability ratio, discuss why it is

not completely satisfactory for measuring an organization’s profitability. What can these ratios tell

us about Arcadia?

? Post your computations, comparisons, and answers as a Microsoft® Word attachment.

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Cash Flow Statement
balance sheet
Revenue and Exp 2006
Revenue and Exp 2005
Net patient revenues
Allowance for doubtful accounts
less:
equals
Patient revenues
Investments
Misc
Total Operating Revenue
Operating expenses:
Operating Revenues
Wages
Taxes & Benefits
Temporary/Contract Labor
Medical/surgical supplies
Other misc supplies
Leases & rentals
Malpractice Insurance
Depreciation/Amortization
Interest Expense
Total Operating Expenses
Professional Fees
Utilities
Other Insurance
Maintenance & Repairs
Dues/subscriptions
Transcription expense
ASSETS
Current Assets
Cash & Cash equivalents
ST Investments
Patient accounts receivable
Other misc receivables
Inventory
Prepaids
less:
Accumulated depreciation/amortization
Net PPE
Property, Plant, & Equipment (PPE)
TOTAL ASSETS
LIABILITIES & EQUITY
Current Liabilities
Accounts Payable
Accrued payroll taxes & wages
Other misc accrued liabilities
Total current liabilities
LT Liabilities
Note payable – mortgage
Bonds payable
TOTAL LIABILITIES
EQUITY
TOTAL LIABILITIES & EQUITY
(Dollars in Millions)
Retained Earnings
Income Statement
Balance Sheet
as of 12/31/2006
Total equity
Property Plant & Equipment
subtotal Current Assets
% of rev
Net Income
Other Income:
YTD Dec 31, 2006
YTD Dec 31, 2005
Budget
Over/(Under)
Net Income from Operations
Net Cash Flow from Operations
Other Current Liabilities
Net Increase/(Decrease) in Cash
Cash Account Beginning Balance
Cash Account Ending Balance
Subtotal Sources/(Uses) of Cash
YE December 31, 2006
Equals Adjusted Net Income
Short Term Investments
Statement of Cash Flows-Indirect Method
Plus Other Operating Sources/(Uses) of Cash:
Accounts Receivable
Purchase of Equipment
Payments on Bonds payable
Add: Deprec / Amort
% of total
%
$
Arcadia…