Thursday

April 17, 2014

April 17, 2014

Posted by **Anna** on Thursday, February 25, 2010 at 8:21pm.

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?

Median for All U.S.

Acute Care Hospitals, 1999

Current ratio 2.07

Inventory turnover 50.35

Total asset turnover 1.01

Days in accounts receivable (collection period) 74.26

Debt financing percentage 43.66

Long-term debt to equity (percent) 31.16

Times interest earned 2.37

Cash flow to total debt (percent) 15.48

Return on assets 2.01

Return on equity 5.46

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