Calculate the Profit Margin for ABC Medical Center

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Reference no: EM131871145

Instructions - 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. (100 points) (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

552,559

 

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

41,154,891

 

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."

All reference must be fully vetted and any and all links must be active and open for review.

Reference no: EM131871145

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