patton fuller

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Ratio Computation for Patton-Fuller Community Hospital Virtual Organization
Team D
HCS/405
July 23rd, 2014
David Lang Ratio Computation for Patton-Fuller Community Hospital Virtual Organization
In this paper, we will review the financial statements of the Patton-Fuller Hospital Virtual Organization. It will consist of computing eight different ratios based on unaudited financial statements, and we will then critique its operating results and financial position. The comparison of the unaudited and audited statements will be confirmed. There will be an explanation of any changes that occurred, and we will also suggest some plans that the hospital Board should make for the next year and next five years.
LIQUIDITY RATIOS
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According to the Patton Fuller hospital’s unaudited balance sheet, their total operating expenses equals 462,293, after subtracting the value of depreciation the total equals 426,257. Dividing 426,257 by 365 equals $1,168 which represents the daily operating amount. Next, the total for cash and cash equivalents must be divided by $1,168 which equals 20, or the days of cash on hand. This indicates that the hospital has 20 days of cash on hand in average and need to slow down on expenditures and utilize cash sparingly.
3 Days Receivables
The days receivables calculation involves computing net receivables divided by net credit revenues/365. Patton Fuller hospital, for the year 2009, had a net receivables amount of 59,787, this amount can be divided by the net credit revenue (459,900) also divided by 365. The calculation is determined by the formula: net receivables = 59,787 = 47 net credit revenue/365 459,900/365 The number of days receivables equals 47 which represents the number of days in receivables. The older an account receivable remains the more difficult it will be to collect.

SOLVENCY RATIOS
4 Debt Service Coverage Ratio (DSCR)

5 Liabilities to Fund Balance
PROFITABILITY RATIOS
1. Operating Margin (%)
The operating margin compares a company’s operating income (earnings before interest and
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