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# Ratio Analysis Assignment Essay

Words: 561, Paragraphs: 2, Pages: 2

Paper type: 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. Days cash on hand| 27. 64| 18. 10| 15. 00| Favorable| 3. Days in A/R| 69. 32| 76. 59| 45. 00| Favorable| 4. Operating margin | 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 = Total Current Assets in Balance 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 Hand = Cash and Cash Equivalents from Balance Sheet / [(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 100| . 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 assumed 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

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