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Use Additional Information from 10-K to Explain Linkages Among Financial Statements Community Health Systems operates general acute care hospitals in communities across the United States. The company reports the following information in Schedule Il of its 2017 10-K. SCHEDULE 11-VALUATION AND QUALIFYING ACCOUNTS Balance at Acquisitions Bad Balance Beginning and Debt Write at End $ millions of Year Dispositions Expense Offs of Year December 31, 2017, allowance for doubtful accounts $3,962 $(22) $3,207 $(3,083) $4,064 December 31, 2016, allowance for doubtful accounts 4,316 (383) 2,991 (2,962) 3,962 December 31, 2015, allowance for doubtful accounts 3,679 (18) 3,326 (2,672) 4,315 Accounts receivable represents the amount customers owe Community Health Systems for services rendered. The balance in the allowance for doubtful accounts is the company's best estimate of the amount that customers will not repay. Community Health Systems' balance sheet and income statement reported the following. $ millions 2017 2016 2015 Revenue $18,398 $21,275 $22,564 Operating income (loss) before tax (1,972) (903) 1,404 Total assets 17,450 21,944 26,861 a. 1. Compute the common-size allowance for doubtful accounts for each year. Note: Round percentage to one decimal point (for example, round 18.566% to 18.6%). 2017 22% x 2016 19 % X 2015 0% X Common size allowance 2. What conclusion may be drawn by analysts in comparing the common size allowance in 2017 to the previous years Use Additional Information from 10-K to Explain Linkages Among Financial Statements Community Health Systems operates general acute care hospitals in communities across the United States. The company reports the following information in Schedule Il of its 2017 10-K. SCHEDULE 11-VALUATION AND QUALIFYING ACCOUNTS Balance at Acquisitions Bad Balance Beginning and Debt Write at End $ millions of Year Dispositions Expense Offs of Year December 31, 2017, allowance for doubtful accounts $3,962 $(22) $3,207 $(3,083) $4,064 December 31, 2016, allowance for doubtful accounts 4,316 (383) 2,991 (2,962) 3,962 December 31, 2015, allowance for doubtful accounts 3,679 (18) 3,326 (2,672) 4,315 Accounts receivable represents the amount customers owe Community Health Systems for services rendered. The balance in the allowance for doubtful accounts is the company's best estimate of the amount that customers will not repay. Community Health Systems' balance sheet and income statement reported the following. $ millions 2017 2016 2015 Revenue $18,398 $21,275 $22,564 Operating income (loss) before tax (1,972) (903) 1,404 Total assets 17,450 21,944 26,861 a. 1. Compute the common-size allowance for doubtful accounts for each year. Note: Round percentage to one decimal point (for example, round 18.566% to 18.6%). 2017 22% x 2016 19 % X 2015 0% X Common size allowance 2. What conclusion may be drawn by analysts in comparing the common size allowance in 2017 to the previous years

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