Reference no: EM131017843

Activity Instructions: Ratio Analysis

Using the following financial information for ABC Medical Center, you are going to conduct financial ratio analysis from the information contained in the table below to make conclusions from this data. Your Activity responses should be both grammatically and mechanically correct and formatted in the same fashion as the Activity itself. If there is a Part A, your response should identify a Part A, etc. In addition, you must appropriately cite all resources used in your response and document them in a bibliography using APA style. (A 4-page response is required for the combination of Parts A, B and C.)

ABC Medical Center 12/31/03		ABC Medical Center 12/31/02
Net Income	2,096,788	Net Income	2,280,365
Operating Revenues	44,699,080	Operating Revenues	38,306,797
Property Taxes	2,307,727	Property Taxes	2,118,989
Investment Income	552,599	Investment Income	523,593
Total Assets	65,675,421	Total Assets	62,245,135
Net Assets	30,369,316	Net Assets	27,583,399
Current Assets	21.547.677	Current Assets	18,061,691
Current Liabilities	5,235,699	Current Liabilities	4,615,954
Cash	8,683.458	Cash	6,173,495
Marketable Securities	1,583,053	Marketable Securities	1,453,156
Total Expenses	43,154,891	Total Expenses	36,550,025
Depreciation	952,861	Depreciation	907,526
Long Term Liability	30,070,406	Long Term Liability	30,045,782
Net Accounts Receivable	8,195,437	Net Accounts Receivable	7,659,899
Net Patient Revenue	42,251,541	Net Patient Revenue	35,913,380
Total Revenue	47,559,406	Total Revenue	40,780,161
Net Fixed Assets	34.438.331	Net Fixed Assets	24,136,723

Part A Calculate the following ratios for ABC Medical Center for years 2003 and 2002.

1. Profit Margin
2. Return on Assets (ROA)
3. Return on Equity (ROE)
4. Current Ratio
5. Days Cash on Hand (Short-Term)
6. Equity Funding
7. Long-Term Debt to Equity
8. Days in Patient Accounts Receivable
9. Fixed Asset Turnover
10. Working Capital

Part B Determine if each ratio calculated in Part A represents an improvement or a negative development in ABC's financial condition. Provide a brief explanation (1-2 sentences) for your answer.

Part C For each ratio calculated and discussed in Part A, provide an explanation, in terms of the accounts composing the ratio, for any increase or decrease in that ratio from 2002 to 2003. For example, "the current ratio decreased due to a combination of decreased assets and increased liabilities."