Assignment 2.2: Ratio Analysis

Assignment 2. 2 Ratio Analysis Name Part 1 Enter the information based on your computations. 2011 2010 Benchmark Favorable (F), Unfavorable (U), or Approximate (A)? 2011/2010 1. Current ratio 3. 52 2. 59 2. 00 Favorable 2. age cash on hand 27. 64 18. 10 15. 00 Favorable 3. Days in A/R 69. 32 76. 59 45. 00 Favorable 4. Operating adjustment 2. 18% 3. 03% 4% Unfavorable 5. Return on total assets 5. 08% 7. 13% 4% Unfavorable 6. Return on net assets 14. 54% 17. 76% 10% Unfavorable 7. Debt to capitalization 61. 21% 53. 69% 50% Unfavorable 8.Times interest earned 2. 47 3. 36 4. 00 Unfavorable 9. Debt service coverage 1. 28 1. 30 2. 00 Approximate 10. Fixed asset turnover 3. 28 2. 88 3. 00 Favorable 11. Salary and benefit/NPSR 84. 08% 82. 82% 55% Unfavorable 1. Current ratio = rack up Current Assets in sleep Sheet / Total Current Liabilities in Balance Sheet 2011 2010 $54,306/$15,425 $39,715/$15,315 3. 52 2. 59 2. Days Cash on fall in = Cash and Cash Equivalents from Balance S heet / (Total Expenses Depreciation Provision for Bad Debts in Statement of Operations) / 365 011 2010 $12,102/($168,232 $6,405 $2,000)/365 $6,486/($138,394 $5,798 $1,800)/365 $12,102/$159,827/365 $6,486/$130. 796/365 $12,102/437. 88 $6,486/358. 34 27. 64 18. 10 3. Days in A/R = Net Patient Accounts Receivable in Balance Sheet / (Net Patient Service Revenue in Statement of Operations / 365) 2011 2010 $28,509/($150,118/365) $25,927/$123,565/365) $28,509/411. 28 $25,927/338. 53 69. 32 76. 59 4. Operating margin = Operating Income from Statement of Operations / Total Revenues in Statement of Operations 2011 2010 3,747/$171,979 $4,330/$142,724 .0218 x vitamin C . 0303 X 100 2. 18% 3. 03% 5. Return on total assets = Net Income in Statement of Operations / Total Assets in Balance Sheet 2011 2010 $7,860/$154,815 $8,206/$115,101 .0508 x 100 . 0713 x 100 5. 08% 7. 13% 6. Return on net assets = Net Income in Statement of Operations / Net Assets in the Balance Sheet 2011 2010 $7,860/$54 ,068 $8,206/$46,208 .1454 x 100 . 1776 x 100 14. 54% 17. 76% 7. Debt to capitalization = Long-term Debt in Balance Sheet / Long term debt + Net Assets in Balance Sheet 2011 2010 85,322/($85,322 + $54,068) $53,578/($53,578 + $46,208) $85,322/$139,390 $53,578/$99,786 .6121 x 100 . 5369 x 100 61. 21% 53. 69% 8. Times interest earned = (Net Income + Interest) in Statement of Operations / Interest in Statement of Operations 2011 2010 ($7,860 + $5,329)/$5,329 ($8,206 + $3,476)/$3,476 $13,189/$5,329 $11,682/$3,476 2. 47 3. 36 9. Debt service coverage = (Net Income + Interest + Depreciation) in Statement of Operations/ Interest + Principal Payments ($10 million sour for this assignment) 2011 2010 ($7,860 + $5,329 + $6. 05)/$15,329 ($8,206 + $3,476 + $5,795)/$13,476 $19,594/$15,329 $17,477/$13,476 1. 28 1. 30 10. Fixed asset turnover = Total Revenues in Statement of Operations / Net Property and Equipment 2011 2010 $171,979/$52,450 $142,724/$49,549 3. 28 2. 88 11. Salary and benefits as a % of net patient revenue = Salaries and Benefits in Statement of Operations / Net Patient Service Revenue in Statement of Operations 2011 2010 $126,223/$150,118 $102,334/$123,565 .8408 X 100 . 8282 x 100 84. 08% 82. 82% Part 2 Type your memo to senior management below