Question 1) Determine the amount of net operating income that would result for a hospital whose payer mix and expected volume (100 cases) is as follows:
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30 Medicare cases
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pay $2,000 per case
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30 Blue Cross Blue Shield cases
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pay $2,200 per case
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20 commercial cases
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pay 100 percent of charges
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10 Medicaid cases
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pay average cost
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8 self-pay cases
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pay 100 percent of charges
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2 charity cases
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pay nothing
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Average cost per case is expected to be $2,200, and the average charge per case is $2,500
Question 2)
1. Calculate gross patient revenue, deductions from gross patient revenue, net patient revenue, total expenses, and excess of revenues over expenses.
2. Define revenue
3. Define fee for service, discounted fee for service, charity services, and payment before service is delivered. ( all written assignments must be in APA format)
Time Value of Money (TVM)
Calculate the Future Value of $1 in each of these 3 projects
TVM Exercise
Project Number of periods Interest rate
Pop 5 11%
Whistle 4 7%
Loop 3 8%
Calculate the Present Value of each of the Projects below:
Project End of period Discount rate Single cash Flow
Pop 5 11% $10,000
Whistle 15 7% 7,500
Loop 25 8% 5,000
Future value and present value concepts are extremely important to the role of financial management and impact cash flow. The response and discussion activities for this objective may require research on the topic of time value in finance.
Explain the role of time value in finance and evaluate the impact it has in financial management.
Define TVM
5) Income Statement Preparation:
Prepare an Income Statement, in proper format, for 2015 for Johnson Medical Supplies (JMS) from the following information:
- Salaries $70,000
- Insurance $700
- Utilities $3,500
- Gas/Auto $5,750
- Office Supplies $7,250
- Revenue $175,000
- Rent $12,000
- Maintenance $50,000
1. Calculate, define, and discuss the operating expenses, operating profit, and profit percentage.
2. Discuss what an income statement is
3. Did JMS have a good year? Why/Why not?
a. Look at industry average
6) Complete the ratios listed based on the following Income Statement and Balance Sheet.
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ABC Company Income Statement
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Last Year
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Sales
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$1,000,000
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$900,000
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Cost of Goods Sold
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$750,000
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$650,000
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Gross Profit
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$250,000
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$250,000
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Operating Expenses
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Selling Expenses
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$50,000
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Administrative Expenses
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$85,000
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Total Operating Expenses
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$135,000
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$127,000
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Operating Income
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$115,000
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$123,000
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Interest Expense
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$17,500
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$17,500
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Net Income before Taxes
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$97,500
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$105,500
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Income Tax Expense
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$34,125
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$36,925
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Net Income after Taxes
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$63,375
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$68,575
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ABC Company Balance Sheet
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Current Assets
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Cash
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$5,500
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$4,950
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Accounts Receivable
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$21,000
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$18,900
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Inventory
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$17,500
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$15,750
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Total Current Assets
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$44,000
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$39,600
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Non-Current Assets
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Machinery & Equipment
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$100,000
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$90,000
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Furniture & Fixtures
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$15,000
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$13,500
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Transportation Equipment
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$25,000
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$22,500
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Accumulated Depreciation
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$17,500
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$15,750
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Total Non-Current Assets
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$122,500
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$110,250
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Total Assets
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$166,500
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$149,850
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Current Liabilities
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Accounts Payable
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$25,000
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$22,500
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Notes Payable
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$15,500
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$13,950
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Wages Payable
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$1,200
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$1,080
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Current Liabilities
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$41,700
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$37,530
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Non-Current Liabilities
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Long-Term Notes
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$27,000
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$24,300
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Total Liabilities
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$68,700
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$61,830
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Stockholders' Equity
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Retained Earnings
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$65,000
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$58,500
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Common Stock
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$32,800
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$29,520
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Total Equity
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$97,800
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$88,020
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Total Liabilities & Equity
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$166,500
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$149,850
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Quick Ratio
Current Ratio
Accounts Receivable Turnover
Inventory Turnover
Net Profit on Sales
Gross Profit Margin
Return on Assets
Return on Equity
Working Capital
Debt to Equity
Times Interest Earned