Calculate some (not all) of the liquidity ratios, profitability ratio, asset eff

Question

Calculate some (not all) of the liquidity ratios, profitability ratio, asset efficiency and capital structure ratios.

Southside Hospital-Summary Balance Sheet FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016 Cash & Marketable Securities 13% 15% 17% $   5,888.00 $   7,428.00 $   8,575.00 Accounts Receivable 7% 7% 7% $   3,108.00 $   3,522.00 $   3,744.00 Other Current Assets 13% 13% 13% $   6,132.00 $   6,194.00 $   6,717.00 Total Current Assets 32% 35% 37% $ 15,128.00 $ 17,144.00 $ 19,036.00 Long-Term Investments 8% 8% 8% $   3,683.00 $   3,748.00 $   3,892.00 Net PP&E (Net Fixed Assets) 57% 55% 53% $ 26,573.00 $ 27,319.00 $ 27,386.00 Total Assets 100% 100% 100% $ 46,626.00 $ 49,453.00 $ 51,556.00 Total Current Liabilities 19% 20% 20% $   8,789.00 $   9,679.00 $ 10,133.00 Long Term Debt 20% 17% 12% $   9,495.00 $   8,370.00 $   6,262.00 Net Assets 0% 0% 0% 0% 0% 0% Unrestricted 53% 56% 57% $ 24,550.00 $ 27,626.00 $ 29,511.00 Restricted 8% 8% 11% $   3,792.00 $   3,778.00 $   5,650.00 Total Net Assets 61% 64% 68% $ 28,342.00 $ 31,404.00 $ 35,161.00 Total Liabilities & Net Assets 100% 100% 100% $ 46,626.00 $ 49,453.00 $ 51,556.00 Southside Hospital-Summary Income Statement FY 2014 FY 2015 FY 2016 Inpatient Services $   126,878.00 $   142,063.00 $   159,577.00 Outpatient Services $     52,177.00 $     55,711.00 $     58,530.00 Deductions from Patient Revenue $   128,404.00 $   144,192.00 $   161,511.00 New Patient Revenues $       1,526.00 $       2,129.00 $       1,934.00 Managed Care Revenue $       5,000.00 $       5,119.00 $       5,170.00 Other Operating Revenue $           160.00 $           162.00 $           163.00 Total Operating Revenue $     55,811.00 $     58,863.00 $     61,929.00 Total Operating Expenses $     51,294.00 $     53,999.00 $     61,929.00 Non-Operating Revenue $           204.00 $           183.00 $           174.00 Net Income $       3,253.00 $       3,062.00 $       3,757.00 Year 2014 2015 2016 Inpatient Revenues $   126,878.00 $   142,063.00 $   159,577.00 Outpatient Revenues $     55,177.00 $     55,711.00 $     58,530.00

Explanation / Answer

The below mentioned ratios have been calculated for FY 2016

Liquidity ratios:

1) Current ratio = Cash & Marketable securities+ accounts receivable+ other current assets(inventory specially)/ current liabilities = current assets/ current liabilities = 8575+3744+6717/10133=1.88

2) Quick ratio = Cash & Marketable securities+accounts receivable/current liabilities =8575+3744/10133=1.22

Profitability ratios:

1) Return on Equity = (Net Income/ Shareholder investment *100)= (3757/35161 * 100) = 10.68%

2) Return on Assets = ( Net Income/ Total assets *100) = ( 3757/51556 *100) = 7.29%

Asset efficiency ratios:

1) Asset Turnover Ratio = Total revenues/ Total assets = 61929+174+159577+58530 /51556 = 5.43

Capital Structure ratios:

1) Debt to equity ratio : Total Debt/ Shareholder's equity = 10133+6262/35161 = 0.47

2) Total Investment to long term liabilities = ( Shareholder's funds + long term liabilities)/ Long term liabilities = (35161+6262)/(6262) = 6.61

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