Posted by **anonymous** on Friday, March 5, 2010 at 5:43pm.

What does rule of thumb evaluation method mean? no matter how many times i read this, I get different answers..and how would I calculate this or what is the formula for the rule of thumb evaluation method???

I am supposed to compute this example:

Arcadia Hospital

Income Statement

YTD Dec 31, 2005

(Dollars in Millions)

Operating Revenues 2005 % of rev Budget Over/(Under)

Patient revenues 500 550

Allowance for doubtful accounts 13 14

Net patient revenues 488 536

Other Income:

Investments 75 60

Misc 5 0

Total Operating Revenue 568 100.00% 596

Operating expenses:

Wages 200 35.24% 180

Taxes & Benefits 75 13.22% 70

Temporary/Contract Labor 5 0.88% 0

Medical/surgical supplies 25 4.41% 30

Other misc supplies 5 0.88% 5

Dues/subscriptions 3 0.53% 3

Transcription expense 10 1.76% 15

Leases & rentals 50 8.81% 45

Malpractice Insurance 75 13.22% 70

Other Insurance 30 5.29% 32

Professional Fees 20 3.52% 20

Utilities 15 2.64% 10

Maintenance & Repairs 15 2.64% 10

Depreciation/Amortization 7 1.23% 7

Interest Expense 1 0.18% 1

Total Operating Expenses 536 94.45% 498

Net Income 32 5.55% 98

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