View the step-by-step solution to:

Use the financial statements for Drs. Smith and Brown, located on the student website, to perform the calculations and complete the form. Review the...

This question was answered on Sep 11, 2011. View the Answer
Resources: Ch. 11 of Health Care Finance, Doctors Smith and Brown Statement of Net Income and Balance Sheet

Use the Axia Material: Ratio Analysis Form to complete the following:

• Define each of the following ratios:

o Current ratio
o Quick ratio
o Debt service coverage ratio
o Operating margin
o Return on total assets

• Explain the purpose of each ratio.
• Compute the following ratios from Drs. Smith & Brown’s financial statements located on the student website:

o Current ratio
o Quick ratio
o Debt service coverage ratio
o Operating margin
o Return on total assets

• Explain what these ratios tell you about the status of the organization. Compare to the median hospitals. See the table in the Axia Material: Ratio Analysis Form.

Cite your references where indicated consistent with APA guidelines.

Post your assignment as an attachment.
Ratio Analysis Form HCA/270 Version 3 1 Axia Material Ratio Analysis Form Use the table on the next page to complete the Week Eight assignment. In this assignment, you will review the textbook to find the definitions for each ratio. Use the financial statements for Drs. Smith and Brown, located on the student website, to perform the calculations and complete the form. Review the following example on how to perform the inventory turnover calculation, which shows you how to complete the table. Two different methods can determine the inventory turnover ratio. o Cost of goods sold—operating revenue of a hospital—divided by ending inventory o Total revenues plus net nonoperating gains divided by ending inventory This example uses the first method to perform the calculation. Because a hospital provides a service, we would find the number that reflects services provided. Total operating revenue reflects money that is earned for providing services. Locate the Statement of Net Income on the student website. Find the total operating revenue. This is $180,000. Then, locate the ending inventory number. To find the ending Inventory, use the Balance Sheet on the student website. The ending inventory number is 5000. Cost of goods sold—operating revenue: 180,000 divided by ending inventory of 5000; 180,000/5000 = 36 Place this information in the table. You will do the same with the rest of the ratios. Take the result of your calculations and place in the grid, as in the example. In addition, you are responsible for stating whether the ratios are solvency, leverage, or profitability ratios. Enter your answers in the appropriate column. Then, explain what these ratios tell us about the physician group practice. Note. You will use the financial statements of Drs. Smith & Brown to perform the calculations on the next page. To calculate the debt service coverage ratio, you need the maximum annual debt service, which is $22,200. The following table shows the median financial ratios for acute care hospitals. You can use this table to gauge the financial viability of the physician group practice.
Background image of page 1
Ratio Analysis Form HCA/270 Version 3 2
Background image of page 2
Show entire document
Sign up to view the entire interaction

Top Answer

We can only answer your free 3 questions one at a time. You have two options to get your questions answered:... View the full answer

This question was asked on Sep 11, 2011 and answered on Sep 11, 2011.

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors and customizable flashcards—available anywhere, anytime.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access or to earn money with our Marketplace.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
  • -

    Flashcards

    Browse existing sets or create your own using our digital flashcard system. A simple yet effective studying tool to help you earn the grade that you want!

    Browse Flashcards