Refer to the financial statements for the Heart Hospital in problem 17.7. Prepare a common size balance sheet (where each account is expressed as a percentage of total assets) and a common size income statement (where each account is expressed as a percentage of total revenues). What do the common size balance sheet and income statement reveal about the Heart Hospital?

Problem 17.7

Recent financial statements for the Heart Hospital are provided below:

• Perform a Du Pont analysis on the Heart Hospital. Assume that the peer group average ratios are as follows:

• Calculate and interpret the following ratios for the Heart Hospital:

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The Heart Hospital Balance Sheet September 30, 2020 (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 Current liabilitics: Accounts payable Accrued compensation and benefits Other accrued liabilities Current portion of long-term debt Total current liabilitics Long-term debt Total liabilities Owners' equity Total liabilities and owners' equity $57,430 $ 1,910 2,543 1,843 2,064 $ 8,360 21,640 $30,000 $27,430 $57,430