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Bayside Memorial Hospital's financial statements are presented in Exhibits 13.1, 13.2, and 13.3.a. Calculate Bayside's financial ratios for 2013. Assume that Bayside had $1 million in lease payments and $1.4 million in debt principal repayments in 2013. (Hint: Use the book discussion to identify the applicable ratios.) b. Interpret the ratios. Use both trend and comparative analysis. For the comparative analysis, assume that the industry average data presented in the book is valid for both 2013 and 2014. 2014 IndustryProfitability ratios: Total margin = Net income / Total revenues 7.5% 5.0%Return on assets = Net income / Total assets 5.7% 4.8%Return on equity = Net income / Total equity 8.0% 8.4% Liquidity ratios: Current ratio = Current assets / Current liabilities 2.3 2.0Days cash on hand = Cash + Marketable securities 22.5 30.6 (Expenses - Depreciation / 365) Debt management ratios: Debt ratio = Total debt / Total assets 29.0% 42.3%Debt to equity ratio = Total debt / Total equity 40.9% 73.3%TIE ratio = EBIT / Interest expense 6.6 4.0CFC ratio = EBIT + Lease payments + Depreciation expense 3.2 2.3 Interest expense + Lease payments + Debt principal / (1-T) Asset management ratios: Fixed asset turnover = Total revenues / Net fixed assets0.95 2.20Total asset turnover ratio = Total revenues / Total assets0.75 0.97Days in patient accounts receivable = Net patient accounts receivable 77.3 64.0 Net patient services revenue / 365 Average age of plant = Accumulated depreciation 6.1 9.1 Depreciation expense

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r so. These repots- and milar reports that may be geciex -are often available from online sness itself mentlfied forms of the 2013 arsd 2014 Income stane Hospital, a 450. bed, not for-peofit, icute care is being used to illastrate financial condicion Bayside ktemorial bniques can be applied to any health services s of revenues over expenses, or net income, of Baside had an exeess r n in 2014. f course, being ot-t for profit, she h ed all of its net income. When looking so it retained all of its ds sse can get a rough idca a of the organization's cash flow, which is expenses. In 2014, y provide fands; it is simply a noncash charge added or equal to its net income a8,572,000 in net income plus $4,130,000 in plus any noncash sra total estimated net cash flow of $12,702,000. Depre dosto obtain an estimate of the business's net cash flow. Later EXHIBIT 13.1 014 013 Bayside Memorial $ 106.502 Hospital State ments of 5 95.398 Pravision for bad debts Net patient service revenue astient service revenue 91.929 tions (Income 4.62 Statements) 6,014 Years Ended S102.565 December 31, Tatal operating revenues 2014 and 2013 $56,752 in thousands 4.718 of dollars) $ 58,285 Dietary services General services Adninistrative services Enployee health and welfare Valpractice insurance 5-424 13.198 11,427 10,250 1,320 4.130 10,705 1,204 4.025 nterest expense Tatal expenses perating income lonoperating income 1,542 $ 6,474 $ 8,572 $102,1 $ 2.395 et ircome

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