Financial Ratio Analysis

Using the data from the attached financial statements for West Texas Regional Hospital (WTRH), calculate the following ratios, then,interpret and briefly explaina trend analysis (compare current to prioryear) and a comparative analysis (compare to industry averages) for each ratio.Be sure to show how you obtained your calculations.

RATIOSWTRH 2016WTRH 2015Industry AveragesTotal Margin5.3Operating Margin3.6Return on Assets (ROA)4.9Return on Equity (ROE)8.3Current Ratio2.0Days Cash on Hand31.5Debt Ratio41.8Times Interest Earned4.0Fixed Asset Turnover2.1Total Asset Turnover0.98Days in Patient A/R68.0Average Age of Plant9.1

2.Operating Indicator Analysis

Using the following data,calculate the following ratios for West Texas Regional Hospital (WTRH), then, interpret and briefly explain a comparative analysis of each ratio.

DATA:

Net inpatient revenue$43,150,750Net outpatient revenue$79,825,000Net patient service revenue$122,975,750Inpatient operating expenses$37,975,000Total salaries$38,250,000Total discharges7,250Inpatient days41,500# licensed and staffed beds250Average daily census166Total FTE's1,500Inpatient FTEs525

RATIOS:

RATIOSWTRH 2016Industry AverageProfit per Discharge$785Net Price per Discharge$5,750Outpatient Revenue %58.5%Occupancy Rate49.2%Average Length of Stay4.7Inpatient FTEs per Occupied Bed5.6Salary per FTE$32,987