13.1 a. What is the primary difference between financial statement analysis and opera- tional analysis?

b. Why are both types of analyses useful to healthcare managers and investors?

13.2 Should financial statement analyses be conducted only on historical data? Explain your answer.

13.3 One asset management ratio, the inventory turnover ratio, is defined as revenues divided by inventories. Would this ratio be more important for a medical device manufacturer or a hospital management company?

13.4 a. Assume that Old Gatorland and Badger Manor, two operators of nursing homes, have fiscal years that end at different timesone in June and one in December. Would this fact cause any problems when comparing ratios between the two businesses?

13.5 a.

How does inflation distort ratio analysis comparisons, both for one company

13.6 a.

b. Which is more important?

Chapter 13: Assessing Financial Condition 411

b. Assume that two companies that operate walk-in clinics both have the same December year end, but one is based in Aspen (a winter resort town), while the other operates on Nantucket Island (a summer destination). Would this differ- ence in location lead to problems in a comparative analysis?

over time and when different companies are compared?

b. Are only balance sheet accounts or both balance sheet accounts and income

statement items affected by inflation?

What is the difference between trend analysis and comparative analysis?

13.7 Assume that a large group practice has a low return on equity. How could DuPont analysis be used to identify possible actions to help boost profitability?

13.8 Regardless of the specific line of business, should all healthcare businesses use the same set of ratios when conducting a financial statement analysis? Explain your answer.