Calculate the profit margin ratios for abc medical center

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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."

Reference no: EM131017843

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