21. Horizontal, vertical, and ratio analyses. Exhibits 4.27a and 4.27b show the statement of operations and...

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21. Horizontal, vertical, and ratio analyses. Exhibits 4.27a and 4.27b show the statement of operations and balance sheet for the 310-bed Wakeland Community Hospital for 20X0 and 20X1. Adjusted discharges for 20X0 and 20X1 are 25,000 and 26,000, respectively. a. Perform a horizontal analysis on both statements. b. Perform a vertical analysis on both statements relative to 20x0. C. Compute all the selected ratios listed in Exhibit 4.16a, and compare them with the industry benchmarks. Using these financial performance measures, evaluate the financial state of Wakeland Community. The debt principal payments each year are $5.5 million, whereas adjusted discharges, as mentioned, are 25,000 in 20X0 and 26,000 in 20X1. 200 CHAPTER 4 FINANCIAL STATEMENT ANALYSIS EXHIBIT 4.27a STATEMENT OF OPERATIONS FOR WAKELAND COMMUNITY HOSPITAL Wakeland Community Hospital Statement of Operations for the Years Ended December 31, 20X1 and 20X0 (in thousands) Revenues Net patient service revenue Other operating revenue Total operating revenues Operating expenses Salaries and benefits Supplies and other expenses Depreciation Interest Total operating expenses Income from operations Nonoperating income Investment income/contributions Excess of revenue over expenses Net income 20X1 $225,000 6,400 231,400 124,173 85,000 12,000 4,500 225,673 5,727 7,500 13,227 $13,227 20x0 $210,000 5,700 215,700 110,167 61,000 11,300 2,500 184,967 30,733 8,500 39,233 $39,233 EXHIBIT 4.276 BALANCE SHEET FOR WAKELAND COMMUNITY HOSPITAL Wakeland Community Hospital Balance Sheet December 31, 20X1 and 20x0 (in thousands) Current assets Cash and cash equivalents Net patient accounts receivables Inventories Other current assets Total current assets Plant property, and equipment Gross plant, property, and equipment (Less accumulated depreciation) Net property, plant, and equipment Funded depreciation/board-designated funds Cash and short-term investments Total assets Current liabilities Accounts payable Salaries payable Notes payable Total current liabilities Long-term liabilities Bonds payable Total long-term liabilities Net assets Total liabilities and net assets 20x1 $40,500 39,500 3,800 6,500 90,300 215,000 (65,000) 150,000 185.000 $425,300 $14,500 4,500 4,300 23,300 60,000 60,000 342,000 $425,300 20x0 $35,500 36,400 4,000 5,200 81,100 175,500 (107.000) 68,500 110,000 $259,600 $8,500 3.500 4,500 16,500 27,500 27,500 215,600 $259,600 21. Horizontal, vertical, and ratio analyses. Exhibits 4.27a and 4.27b show the statement of operations and balance sheet for the 310-bed Wakeland Community Hospital for 20X0 and 20X1. Adjusted discharges for 20X0 and 20X1 are 25,000 and 26,000, respectively. a. Perform a horizontal analysis on both statements. b. Perform a vertical analysis on both statements relative to 20x0. C. Compute all the selected ratios listed in Exhibit 4.16a, and compare them with the industry benchmarks. Using these financial performance measures, evaluate the financial state of Wakeland Community. The debt principal payments each year are $5.5 million, whereas adjusted discharges, as mentioned, are 25,000 in 20X0 and 26,000 in 20X1. 200 CHAPTER 4 FINANCIAL STATEMENT ANALYSIS EXHIBIT 4.27a STATEMENT OF OPERATIONS FOR WAKELAND COMMUNITY HOSPITAL Wakeland Community Hospital Statement of Operations for the Years Ended December 31, 20X1 and 20X0 (in thousands) Revenues Net patient service revenue Other operating revenue Total operating revenues Operating expenses Salaries and benefits Supplies and other expenses Depreciation Interest Total operating expenses Income from operations Nonoperating income Investment income/contributions Excess of revenue over expenses Net income 20X1 $225,000 6,400 231,400 124,173 85,000 12,000 4,500 225,673 5,727 7,500 13,227 $13,227 20x0 $210,000 5,700 215,700 110,167 61,000 11,300 2,500 184,967 30,733 8,500 39,233 $39,233 EXHIBIT 4.276 BALANCE SHEET FOR WAKELAND COMMUNITY HOSPITAL Wakeland Community Hospital Balance Sheet December 31, 20X1 and 20x0 (in thousands) Current assets Cash and cash equivalents Net patient accounts receivables Inventories Other current assets Total current assets Plant property, and equipment Gross plant, property, and equipment (Less accumulated depreciation) Net property, plant, and equipment Funded depreciation/board-designated funds Cash and short-term investments Total assets Current liabilities Accounts payable Salaries payable Notes payable Total current liabilities Long-term liabilities Bonds payable Total long-term liabilities Net assets Total liabilities and net assets 20x1 $40,500 39,500 3,800 6,500 90,300 215,000 (65,000) 150,000 185.000 $425,300 $14,500 4,500 4,300 23,300 60,000 60,000 342,000 $425,300 20x0 $35,500 36,400 4,000 5,200 81,100 175,500 (107.000) 68,500 110,000 $259,600 $8,500 3.500 4,500 16,500 27,500 27,500 215,600 $259,600