In: Finance
Happy Hospital has the following financial statements:
Happy Hospital | |
Statement of Financial Position | |
As of December 31, 2018 | |
Assets | |
Current Assets | |
Cash and Cash Equivalents | $ 804,331 |
Patients Receivable, Net of Allowances for Uncollectibles | 9,937,932 |
Inventory | 1,234,344 |
Prepaid Expenses and Other Assets | 504,329 |
Total Current Assets | 12,480,936 |
Assets Limited as to Use | 55,732,204 |
Investments | 11,639,529 |
Property and Equipment, Net | 16,347,859 |
Prepaid Pension Asset | 296,797 |
Total Assets | $ 96,497,325 |
Liabilities and Net Assets | |
Current Liabilities | |
Accounts Payable and Accrued Expenses | $ 1,601,308 |
Accrued Compensation and Amounts Withheld | 2,399,365 |
Current Portion of Estimated Third-Party Settlements | 322,161 |
Total Current Liabilities | 4,322,834 |
Estimated Third-Party Settlements, Less Current Portion | 3,697,939 |
Total Liabilities | 8,020,773 |
Net Assets | |
Without Donor Restrictions | 77,478,008 |
With Donor Restrictions | 10,998,544 |
Total Net Assets | 88,476,552 |
Total Liabilities and Net Assets | $ 96,497,325 |
Happy Hospital | |
Operating Statement | |
For the Year Ending December 31, 2018 | |
Revenues without Donor Restrictions | |
Net Patient Service Revenue | $47,632,591 |
Other Operating Revenue | 4,569,710 |
Total Operating Revenues | 52,202,301 |
Expenses | |
Wages | 45,076,683 |
Insurance | 2,024,899 |
Inventory | 1,053,367 |
Depreciation | 2,421,597 |
Provision for Uncollectible Accounts | 2,237,701 |
Total Expenses | 52,814,247 |
(Loss) from Operations Before Adjustments | (611,946) |
Pension Expense in Excess of Plan Contribution | (451,432) |
Adjustments to Prior Year Third-Party Payer Settlements | 1,360,937 |
Operating (Loss) Income | 297,559 |
Nonoperating Gains | |
Investment Income | 96,280 |
Unrestricted Gifts and Bequests | 43,152 |
Other Miscellaneous Income | 12,300 |
Nonoperating Gains | 151,732 |
Excess of Revnues and Gains Over Expenses | 449,291 |
Changes in Net Unrealized Gain on Investments | 31,704 |
Increases in Net Assets without Donor Restrictions | $480,995 |
Using the information given above, calculate the following ratios:
[Round your numbers to TWO decimal places]
(A) Return on Equity:
(B) Total Margin:
(C) Total Asset Turnover: .
(D) Equity Multiplier:
A) ROE= Net Income/ stake holders equity
= (Total revenue- Total expenses) / (Total assets - Total liabilities)
= (52,202,301- 52,814,247) / (964597325-8020773)
= -6,11,946 / 8,84,76,552
= -0.006
I have considered only operating revenue and expenses in the calculation.since net income is -ve the ROE is also -ve.
B) Total Margin= Excess Revenues over Expenses/Total Revenue) x 100
=(449,291 /52,202,301)*100
=0.86
c) Total asset turnover= total sales/ total assets
= 52,202,301/96,497,325
=0.54
D) Equity Multiplier- Total Assets/ share holders equity
= 96497325 / (964597325-8020773)
=1.091