1.Financial Ratio Analysis
Using the data from the attached financial statements for West Texas Regional Hospital (WTRH), calculate the following ratios, then,interpret and briefly explaina trend analysis (compare current to prioryear) and a comparative analysis (compare to industry averages) for each ratio. Be sure to show how you obtained your calculations.
RATIOS |
WTRH 2016 |
WTRH 2015 |
Industry Averages |
Total Margin |
|
|
5.3 |
Operating Margin |
|
|
3.6 |
Return on Assets (ROA) |
|
|
4.9 |
Return on Equity (ROE) |
|
|
8.3 |
Current Ratio |
|
|
2.0 |
Days Cash on Hand |
|
|
31.5 |
Debt Ratio |
|
|
41.8 |
Times Interest Earned |
|
|
4.0 |
Fixed Asset Turnover |
|
|
2.1 |
Total Asset Turnover |
|
|
0.98 |
Days in Patient A/R |
|
|
68.0 |
Average Age of Plant |
|
|
9.1 |
2.Operating Indicator Analysis
Using the following data,calculate the following ratios for West Texas Regional Hospital (WTRH), then, interpret and briefly explain a comparative analysis of each ratio.
DATA:
Net inpatient revenue |
$43,150,750 |
Net outpatient revenue |
$79,825,000 |
Net patient service revenue |
$122,975,750 |
Inpatient operating expenses |
$37,975,000 |
Total salaries |
$38,250,000 |
Total discharges |
7,250 |
Inpatient days |
41,500 |
# licensed and staffed beds |
250 |
Average daily census |
166 |
Total FTE's |
1,500 |
Inpatient FTEs |
525 |
RATIOS:
RATIOS |
WTRH 2016 |
Industry Average |
Profit per Discharge |
|
$785 |
Net Price per Discharge |
|
$5,750 |
Outpatient Revenue % |
|
58.5% |
Occupancy Rate |
|
49.2% |
Average Length of Stay |
|
4.7 |
Inpatient FTEs per Occupied Bed |
|
5.6 |
Salary per FTE |
|
$32,987 |
Lesson Page 11/16/17, 8:37 PMLesson Page Page 1 of 4file:///Users/judithgonzalez/Documents/WK13Assignment.webarchive ! PRINT VIEW " INDEX OF PAGES BACK NEXT Course Content ∠ Week 13 WEEK 13: FINANCIAL CONDITION ANALYSIS In this lesson, we will learn about financial condition analysis, including financial statement analysis and operating indicator analysis, both of which are means of assessing and analyzing a business's financial condition. LEARNING OBJECTIVES Explain the purposes of financial statement and operating indicator analyses Describe the primary techniques used in financial statement and operating indicator analyses Conduct basic financial statement and operating indicator analyses to assess the financial condition of a business Describe how key performance indicators and dashboards can be used to monitor financial condition Week 13 Requirements Read Chapter 17 Read Chapter 17 Supplement Listen to the Chapter 17 lecture Complete the Week 13 assignment (10 points) https://elearn.ttuhsc.edu/portal/tool/aed275f6-8b3c-4d0a-a09d-c96b2af62794/PagePicker?returnView=&studentItemId=0&backPath=&errorMessage=&clearAttr=&source=summary&title=&sendingPage=-1&newTopLevel=false&postedComment=false&addBefore=&itemId=-1&path=&addTool=-1&recheck=&id= https://elearn.ttuhsc.edu/portal/tool/aed275f6-8b3c-4d0a-a09d-c96b2af62794/PagePicker?returnView=&studentItemId=0&backPath=&errorMessage=&clearAttr=&source=summary&title=&sendingPage=-1&newTopLevel=false&postedComment=false&addBefore=&itemId=-1&path=&addTool=-1&recheck=&id= https://elearn.ttuhsc.edu/portal/tool/aed275f6-8b3c-4d0a-a09d-c96b2af62794/ShowPage?returnView=&studentItemId=0&backPath=pop&errorMessage=&clearAttr=&source=&title=&sendingPage=1066718&newTopLevel=false&postedComment=false&addBefore=&itemId=4532966&path=0&addTool=-1&recheck=&id= https://elearn.ttuhsc.edu/portal/tool/aed275f6-8b3c-4d0a-a09d-c96b2af62794/ShowPage?returnView=&studentItemId=0&backPath=push&errorMessage=&clearAttr=&source=&title=&sendingPage=1072984&newTopLevel=false&postedComment=false&addBefore=&itemId=4569775&path=next&addTool=-1&recheck=&id= https://elearn.ttuhsc.edu/portal/tool/aed275f6-8b3c-4d0a-a09d-c96b2af62794/ShowPage?returnView=&studentItemId=0&backPath=&errorMessage=&clearAttr=&source=&title=&sendingPage=1066718&newTopLevel=false&postedComment=false&addBefore=&itemId=4532966&path=0&addTool=-1&recheck=&id= 11/16/17, 8:37 PMLesson Page Page 2 of 4file:///Users/judithgonzalez/Documents/WK13Assignment.webarchive OPTIONAL READING The following article that discusses some of the issues presented in this week's lesson regarding declines in U.S. nonprofit hospitals and the reasons for these projected declines in operating margins. health-system-management.advanceweb.com...tal-performance-may-decline-in-2016-17/$ ADDITIONAL RESOURCE Financial Ratios - Gapenski online appendix a.pdf ASSIGNMENT Complete the following problems (these are NOT found in the textbook): 1. Financial Ratio Analysis Using the data from the attached financial statements for West Texas Regional Hospital (WTRH), calculate the following ratios, then, interpret and briefly explain a trend analysis (compare current to prior year) and a comparative analysis (compare to industry averages) for each ratio. Be sure to show how you obtained your calculations. RATIOS WTRH 2016 WTRH 2015 Industry Averages Total Margin 5.3 Operating Margin 3.6 Return on Assets (ROA) 4.9 Return on Equity (ROE) 8.3 Current Ratio 2.0 Days Cash on Hand 31.5 Debt Ratio 41.8 Times Interest Earned 4.0 Fixed Asset Turnover 2.1 Total Asset Turnover 0.98 https://elearn.ttuhsc.edu/access/lessonbuilder/item/4532880/ https://elearn.ttuhsc.edu/access/lessonbuilder/item/4532882/group/XLS5Z201821/Week%2013/Financial%20Ratios%20-%20Gapenski%20online%20appendix%20a.pdf 11/16/17, 8:37 PMLesson Page Page 3 of 4file:///Users/judithgonzalez/Documents/WK13Assignment.webarchive Days in Patient A/R 68.0 Average Age of Plant 9.1 2. Operating Indicator Analysis Using the following data, calculate the following ratios for West Texas Regional Hospital (WTRH), then, interpret and briefly explain a comparative analysis of each ratio. DATA: Net inpatient revenue $43,150,750 Net outpatient revenue $79,825,000 Net patient service revenue $122,975,750 Inpatient operating expenses $37,975,000 Total salaries $38,250,000 Total discharges 7,250 Inpatient days 41,500 # licensed and staffed beds 250 Average daily census 166 Total FTE's 1,500 Inpatient FTEs 525 RATIOS: RATIOS WTRH 2016 Industry Average Profit per Discharge $785 Net Price per Discharge $5,750 Outpatient Revenue % 58.5% Occupancy Rate 49.2% Average Length of Stay 4.7 Inpatient FTEs per Occupied Bed 5.6 Salary per FTE $32,987 WTRH Financial Statements.pdf Week 13 Assignment (W13-A)& https://elearn.ttuhsc.edu/access/lessonbuilder/item/4532885/group/XLS5Z201821/Course%20Content/Week%2013/WTRH%20Financial%20Statements.pdf https://elearn.ttuhsc.edu/portal/tool/aed275f6-8b3c-4d0a-a09d-c96b2af62794/ShowItem?returnView=&studentItemId=0&backPath=&errorMessage=&clearAttr=&source=&title=&sendingPage=1066726&newTopLevel=false&postedComment=false&addBefore=&itemId=4532886&path=&addTool=-1&recheck=&id= 11/16/17, 8:37 PMLesson Page Page 4 of 4file:///Users/judithgonzalez/Documents/WK13Assignment.webarchive NEXTBACK LECTURES AND POWERPOINT SLIDES Week 13 Chapter 17 Lecture - Financial Condition Analysis$ Week 13 Chapter 17 Printable Deck https://elearn.ttuhsc.edu/portal/tool/aed275f6-8b3c-4d0a-a09d-c96b2af62794/ShowPage?returnView=&studentItemId=0&backPath=push&errorMessage=&clearAttr=&source=&title=&sendingPage=1072984&newTopLevel=false&postedComment=false&addBefore=&itemId=4569775&path=next&addTool=-1&recheck=&id= https://elearn.ttuhsc.edu/portal/tool/aed275f6-8b3c-4d0a-a09d-c96b2af62794/ShowPage?returnView=&studentItemId=0&backPath=pop&errorMessage=&clearAttr=&source=&title=&sendingPage=1066718&newTopLevel=false&postedComment=false&addBefore=&itemId=4532966&path=0&addTool=-1&recheck=&id= https://elearn.ttuhsc.edu/access/lessonbuilder/item/4589740/ https://elearn.ttuhsc.edu/access/lessonbuilder/item/4589741/group/XLS5Z201821/Week%2013/W13,%20Chp%2017-%20FIN%20Condition%20Analysis%20w%20notes%20RAS%20171115.pdf