Reference no: EM131594474

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:

30 Medicare cases		pay $2,000 per case
30 Blue Cross Blue Shield cases		pay $2,200 per case
20 commercial cases		pay 100 percent of charges
10 Medicaid cases		pay average cost
8 self-pay cases		pay 100 percent of charges
2 charity cases		pay nothing

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.

ABC Company Income Statement					Last Year
Sales			$1,000,000		$900,000
Cost of Goods Sold			$750,000		$650,000
Gross Profit			$250,000		$250,000
Operating Expenses
Selling Expenses		$50,000
Administrative Expenses		$85,000
Total Operating Expenses			$135,000		$127,000
Operating Income			$115,000		$123,000
Interest Expense			$17,500		$17,500
Net Income before Taxes			$97,500		$105,500
Income Tax Expense			$34,125		$36,925
Net Income after Taxes			$63,375		$68,575

ABC Company Balance Sheet

Current Assets
Cash			$5,500		$4,950
Accounts Receivable			$21,000		$18,900
Inventory			$17,500		$15,750
Total Current Assets			$44,000		$39,600
Non-Current Assets
Machinery & Equipment			$100,000		$90,000
Furniture & Fixtures			$15,000		$13,500
Transportation Equipment			$25,000		$22,500
Accumulated Depreciation			$17,500		$15,750
Total Non-Current Assets			$122,500		$110,250
Total Assets			$166,500		$149,850
Current Liabilities
Accounts Payable			$25,000		$22,500
Notes Payable			$15,500		$13,950
Wages Payable			$1,200		$1,080
Current Liabilities			$41,700		$37,530
Non-Current Liabilities
Long-Term Notes			$27,000		$24,300
Total Liabilities			$68,700		$61,830
Stockholders' Equity
Retained Earnings			$65,000		$58,500
Common Stock			$32,800		$29,520
Total Equity			$97,800		$88,020
Total Liabilities & Equity			$166,500		$149,850

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