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1. Please calculate the following ratios for Moses Cone Memorial Hospital and Consolidated Affiliates for 2013 and 2014 and then compare the ratios to national industry benchmark using exhibit 4.16a on p. 185 in the textbook. (Moses Cone Memorial Hospital has more than 500 beds).

• Current ratio
• Days in accounts receivable
• Operating margin
• Return on total assets
• Salary expense as percentage of operating expense

2. Interpret the above ratios: discuss briefly current liquidity and profitability positions and future outlooks based on these results.
3. Given the following information, compute the working capital (working capital=current assets current liabilities).

Hint: sometimes not all the information given is necessary for calculations. The first step is to figure out which information is useful and which one is useless.

Givens (in 000s):
Inventory	$4,000
Patient revenues (net of contractuals)	$302,000
Gross plant, property, and equipment	$375,000
Net accounts receivable	$85,000
Ending balance, temporarily restricted net assets	$6,000
Wages payable	$6,600
Long-term debt	$218,400
Supply expense	$34,000
Net assets released from temporary restriction	$7,000
Depreciation expense	$44,000
General expense	$95,000
Provision for bad debt expense	$4,500
Cash and cash equivalents	$18,000
Transfer to parent corporation	($3,900)
Beginning balance, unrestricted net assets	$239,400
Accounts payable	$11,000
Beginning balance, temporarily restricted net assets	$13,000
Interest expense	$6,000
Labor expense	$123,000
Accumulated depreciation	$22,000
Long-term investments	$20,000
Ending balance, unrestricted net assets	$238,000

Optum & CMS Median Ratio" Hospital Industry 200-299 Beds 300-399 Beds Desired Position 400+ Beds 1-99 Beds 100-199 Beds Ratio 2.11 1.52 0.30 49 86 50 2.18 1.65 0.35 47 85 45 2.04 1.39 0.18 45 81 51 1.88 1.27 0.20 44 102 56 1.71 1.42 0.20 48 76 53 1.84 1.50 0.38 44 119 52 Above Above Abov Belo Abo Bela $7,448 $7,197 40% $6,407 $6,112 38% $7,086 $6,494 40% $7,517 $7,399 $6,766 $6,260 38% $7,121 $6,819 38% Aba Belc Belo 38% Liquidity ratios Current ratio Quick ratio Acid test ratio Days in accounts receivable Days cash on hand Average payment period, days Revenue, expense, and profitability ratios Operating revenue per adjusted discharge Operating expense per adjusted discharge Salary and benefit expense as a percentage of operating expense Operating margin Nonoperating revenue Return on total assets Return on net assets Activity ratios Total asset turnover ratio Net fixed assets turnover ratio Age of plant ratio Capital structure ratios Long-term debt to net assets ratio Net assets to total assets ratio Times interest earned ratio Debt service coverage ratio 0.03 0.04 0.04 0.08 0.02 0.05 0.04 0.08 0.03 0.03 0.04 0.08 0.04 0.05 0.04 0.09 0.04 0.07 0.05 0.10 0.04 0.17 0.05 0.09 Abc Var Abc Abc 1.07 1.19 2.17 10.41 0.99 2.11 11.97 1.03 2.03 10.12 1.03 2.04 10.93 1.06 2.21 11.19 2.12 10.31 Abc Abo Bel 0.31 0.51 0.21 0.54 3.78 3.18 0.18 0.58 3.47 3.51 0.42 0.47 3.64 3.50 0.38 0.52 4.43 6.36 0.59 0.48 5.13 4.24 Bel Abd Abc Abo 3.43 3.63 of onerating expense ratios, were obtained from Optum Insight, 2013 Almanac of Hospital Finan fum 2010 CMS cost repor Optum & CMS Median Ratio" Hospital Industry 200-299 Beds 300-399 Beds Desired Position 400+ Beds 1-99 Beds 100-199 Beds Ratio 2.11 1.52 0.30 49 86 50 2.18 1.65 0.35 47 85 45 2.04 1.39 0.18 45 81 51 1.88 1.27 0.20 44 102 56 1.71 1.42 0.20 48 76 53 1.84 1.50 0.38 44 119 52 Above Above Abov Belo Abo Bela $7,448 $7,197 40% $6,407 $6,112 38% $7,086 $6,494 40% $7,517 $7,399 $6,766 $6,260 38% $7,121 $6,819 38% Aba Belc Belo 38% Liquidity ratios Current ratio Quick ratio Acid test ratio Days in accounts receivable Days cash on hand Average payment period, days Revenue, expense, and profitability ratios Operating revenue per adjusted discharge Operating expense per adjusted discharge Salary and benefit expense as a percentage of operating expense Operating margin Nonoperating revenue Return on total assets Return on net assets Activity ratios Total asset turnover ratio Net fixed assets turnover ratio Age of plant ratio Capital structure ratios Long-term debt to net assets ratio Net assets to total assets ratio Times interest earned ratio Debt service coverage ratio 0.03 0.04 0.04 0.08 0.02 0.05 0.04 0.08 0.03 0.03 0.04 0.08 0.04 0.05 0.04 0.09 0.04 0.07 0.05 0.10 0.04 0.17 0.05 0.09 Abc Var Abc Abc 1.07 1.19 2.17 10.41 0.99 2.11 11.97 1.03 2.03 10.12 1.03 2.04 10.93 1.06 2.21 11.19 2.12 10.31 Abc Abo Bel 0.31 0.51 0.21 0.54 3.78 3.18 0.18 0.58 3.47 3.51 0.42 0.47 3.64 3.50 0.38 0.52 4.43 6.36 0.59 0.48 5.13 4.24 Bel Abd Abc Abo 3.43 3.63 of onerating expense ratios, were obtained from Optum Insight, 2013 Almanac of Hospital Finan fum 2010 CMS cost repor

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