Reference no: EM132478318

Question - Recent financial statements for The Heart Hospital are provided below:

The Heart Hospital, Balance Sheet, September 30, 2015 (in thousands)

Current assets:

Cash $14,202

Accounts receivable, net 5,918

Medical supplies inventory 1,211

Prepaid expenses and other current assets 1,429

Total current assets $22,760

Property, plant, and equipment, net $33,769

Other assets 901

Total assets $57,430

Current liabilities: Accounts payable $1,910

Accrued compensation and benefits 2,543

Other accrued liabilities 1,843

Current portion of long-term debt 2,064

Total current liabilities $ 8,360

Long-term debt 21,640

Total liabilities$30,000

Owners' equity $27,430

Total liabilities and owners' equity $57,430

Required -

A. Perform a Du Pont analysis on The Heart Hospital. Assume that the industry average ratios are as follows: Total margin15.0% Total asset turnover 1.5 Equity multiplier 1.67 Return on equity (ROE) 37.6%.

B. Calculate and interpret the following ratios for The Heart Hospital:

1. Industry Average Return on assets (ROA)

2. Current ratio

3. Days cash on hand

4. Average collection period

5. Debt ratio

6. Debt-to-equity ratio

7. Times interest earned (TIE) ratio

8. Fixed asset turnover ratio.