Horizontal, vertical, and ratio analyses. Exhibits 4.29a and 4.29b show the statement of operations and balance sheet for Resort Hospital for 20X1 and 20X0. The debt principal payment each year for Resort is $1,300,000, and its adjusted discharges are 6,500 for 20X0 and 5,500 for 20X1.
a.Perform horizontal and vertical analyses on the balance sheet using the statement of operations.
b. Perform horizontal and vertical analyses using the balance sheet.
c. Compute all the selected ratios listed in Exhibit 4.16a.
Evaluate the financial state of Resort Hospital, a 60-bed facility, using all of the above measures. Make the basis for the vertical analysis the year 20X0.
Resort Hospital
Statement of Operations for the Years Ended December 31, 20X1 and 20X0 (in thousands)
|
Particulars
|
20x1
|
20x0
|
|
Revenues
|
|
|
|
Net patient service revenue
|
$33,500
|
$30,500
|
|
Other operating revenue
|
2,600
|
2,500
|
|
Total operating revenues
|
36,100
|
33,000
|
|
Expenses
|
|
|
|
Salaries and benefits
|
23,500
|
19,600
|
|
Supplies and other expenses
|
11,400
|
10,500
|
|
Depreciation
|
700
|
700
|
|
Interest
|
710
|
710
|
|
Total operating expenses
|
36,310
|
31,510
|
|
Operating income
|
(210)
|
1,490
|
|
Nonoperating revenue
|
6,500
|
1,200
|
|
Excess of revenue over expenses
|
$6,290
|
$2,690
|
Exhibit 4.27b Balance Sheet for Resort Hospital
|
Particulars
|
20x1
|
20x0
|
|
Current assets
|
|
|
|
Cash and cash equivalents
|
$1,500
|
$2,500
|
|
Net patient A/R
|
6,500
|
4,800
|
|
Inventories
|
400
|
350
|
|
Prepaid expense
|
350
|
250
|
|
Total current assets
|
8,750
|
7,900
|
|
|
|
|
Plant, property, and equipment
|
|
|
|
Gross plant, property, and equipment
|
22,000
|
19,500
|
|
Less Accumulated depreciation)
|
(12,700)
|
(12,000)
|
|
Net property, plant, and equipment
|
9,300
|
7,500
|
|
Long-term investments
|
16,500
|
10,500
|
|
Total assets
|
$34,550
|
$25,900
|
|
|
|
|
Current liabilities
|
|
|
|
Account Payable
|
$5,300
|
$3,800
|
|
Salaries payable
|
1,000
|
900
|
|
Total current liabilities
|
6,300
|
4,700
|
|
Long-term liabilities
|
|
|
|
Bonds payable
|
1,200
|
2,500
|
|
Total long-term liabilities
|
1,200
|
2,500
|
|
Net assets
|
27,050
|
18,700
|
|
Total liabilities and assets
|
$34,550
|
$25,900
|