1 Ratio Name Procedure Step 1. Write the formula Explain what the formula means (Example) Current Ratio Current Assets/Current Liabilities The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year. It tells investors and analysts how a company can maximize the current assets on its balance sheet to satisfy its current debt and other payables. Pima Medical Center Tucson Regional Procedure Step FY2019 FY2020 FY2021 FY2021 2. Use excel formulas to do the calculation 0.946957 0.963350 0.964296 1.661200 3. Format the answer 0.95 0.96 0.96 1.66 Correct Correct Correct Correct Calculate the given 15 Ratios for BOTH hospitals. 00 2 Ratio Name Procedure Step 1. Write the formula Explain what the formula means Acid Test Ratio Pima Medical Center Tucson Regional WU Procedure Step FY2019 FY2020 FY2021 FY2021 2. Use excel formulas to do the calculation 3. Format the answer Incorrect Incorrect Incorrect Incorrect 3 Ratio Name Procedure Step 1. Write the formula Explain what the formula means Profit MarginHospital Financial Statements Financial Statements Income Statements Pima Medical Center Tucson Regional 2019 2020 2021 2021 Revenues $51,336 $51,533 58,752 11,789 Salaries and Benefits 23,560 23,874 26,779 5,411 Supplies Expense 8,481 8,369 9,481 1,963 Other Operating Expenses 9,481 9,307 9,961 2,857 Depreciation/Amortization 2,596 2,721 2,853 458 Interest Expense 1,824 1,584 1,566 1,031 Total Operating Expenses 45,942 45,855 50,640 11,720 Operating Income 5,394 5,678 8, 112 69 Income Taxes 1,099 1,043 2,112 14 Net Income 4,295 4,635 6,000 55 Note: Amounts in 1,000s of dollars Balance Sheets 2019 2020 2021 2021 Assets Cash 621 1,793 1,451 1,676 Short-Term Investments 147 116 103 Accounts Receivables, Net 7,333 7,159 8,095 1,927 Supplies Inventory 1,849 2,025 1,986 335 Other Current Assets 1,190 1,340 1,896 519 Total Current Assets 11, 140 12,433 13,531 4,457 Net Property, Plant & Equipment 24,549 25,223 26, 176 5,322 Long-Term Note Receivable 37 31 44 593 Balance Sheets 2019 2020 2021 2021 Assets Cash 621 1,793 1,451 1,676 Short-Term Investments 147 116 103 8 Accounts Receivables, Net 7,333 7,159 8,095 1,927 Supplies Inventory 1,849 2,025 1,986 335 Other Current Assets 1,190 1,340 1,896 519 Total Current Assets 11,140 12,433 13,531 4,457 Net Property, Plant & Equipment 24,549 25,223 26,176 5,322 Long-Term Note Receivable 37 31 44 59 Intangible Assets 8,269 8,578 9,540 4,219 Total Assets 43,995 46,265 49,291 14,057 8 Liabilities & Shareholders' Equity Accounts Payable 2,357 2,581 2,842 383 Short Term Debt 145 209 237 980 Current Portion of Long Term Debt 4,905 5,535 6, 111 533 Other Current Liabilities 2,303 2,267 2,461 150 Accrued Payroll 2,054 2,314 2,381 637 Total Current Liabilities 11,764 12,906 14,032 2,683 Long-Term Debt 23, 107 20,301 23,765 11,033 16 Total Liabilities 34,871 33,207 37,797 13,716 00 19 Total Shareholders' Equity 9, 124 13,058 11,494 341 Liabilities & Shareholders' Equity 43,995 46,265 49,291 14,057A B C D E F G Ratio List W N A EH Chapter Ratio Text Page Formula Liquidity Ratios Current Ratio 77 Total Current Assets / Total Current Liabilities Acid Test Ratio 92 (Cash and cash equivalent + Short-Term Investments + Accounts receivable, Net) / Total Current liabilities Profitability 3 Profit Margin 61 Net Income/Revenues 13 na Operating Margin Operating Income/Revenues 1 Return on Assets 26 Net Income/Total Assets Activity/Turnover 14 6 Inventory Turnover 112 Supplies Expense/Supplies Inventory na Days in Inventory 365 days / Inventory Turnover Ratio 8 Days in Accounts Receivable 148 Accounts Receivables, Net / (Revenues / 365 days) 9 AR Turnover 164 365 days / Days in Accounts Receivable Days in Accounts Payable 130 Accounts Payable/(Supplies Expense/365) 19 24 Cash Conversion Cycle 406 Days in Inventory + Days in Accounts Receivable - Days in Accounts Payables 20 21 Solvency Ratios 22 2 2 Debt Ratio 43 Total Liabilities / Total Assets 23 10 11 Times Interest Earned 197 EBIT / Interest Expense 24 11 14 Debt to Equity Ratio 244 Total Liabilities / Total Shareholders' Equity 25 15 na Days Cash on Hand Total Cash and unrestricted Investment / (Total Expenses - Depreciation - Amortization) 27 Students: Please note that the terms here are a little different than in the text book to conform with the financial statements provided here. 28 Also please not that for a couple of ratios you only have one dollar amount per year to use instead of an average. 29 EBIT is earnings before deducting interest and income taxes. 30