Formula: Divide, Subtract; Cell Referencing

Case $4\mathrm{.}3.$ Using Excel to Assess the Debt to Assets Ratio

PROBLEM

Goodfellow & Perkins LLP is a successful mid$-$tier accounting firm with a large range of clients across Texas. During $2025,$ Goodfellow & Perkins gained a new client, Brookwood Pines

Hospital $($BPH$),$ a private, not$-$for$-$profit hospital. The fiscal year$-$end for BPH is June $30.$

Goodfellow & Perkins is performing the audit for the fiscal year$-$end June $30,2026.$ The balance sheets as of June $30,2026$ and $2025$ are presented here.

Brookwood Pines Hospital

Balance Sheet $($in thousands$)$

June $30$

$\backslash$table$[[$Assets$,2026,2025],[$Cash and cash equivalents,$$,43,077,$$$,36,361],[$Short term investments,,$22,725,,49,338],[$Patient accounts receivable, net,,$119,380,,99,962],[\backslash$table$[[$Current portion of pledges and grants$],[$receivable$,$ net$]],,9,208,,5,099],[$Current portion of insurance recoverable,,$2,364,,,1,953],[$Inventory$,,10,740,,10,056],[$Other current assets,,$25,792,,23,193],[$Total current assets,,$233,286,,225,962],[$Long$-$term investments,,$915,088,,807,321],[$Property and equipment, net,,$576,432,,538,981],[$Prepaid pension cost,,$19,760,,7,248],[$Insurance recoverable, less current portion,,$11,619,,10,723],[$Other assets, net,,$31,535,,28,463],[$Total assets,$$,1,787,720,$$$,1,618,698$

programs, less current portion

Grants payable, less current portion

Other liabilities

Total liabilities

$\backslash$table$[[13,245,16,489],[42,669,48,336],[583,581,593,766]]$

Net assets

Without donor restrictions

With donor restrictions

Total net assets

Total liabilities and net assets

$\backslash$table$[[,\backslash$table$[[1,138,140$

Student Work Area

Required: Provide input into cells shaded in yellow in this template. Use mathematical formulas with cell references to the Problem and work areas as indicated.

Calculate the debt to assets ratio for $2026$ and $2025$ and the percentage change in the ratio over the two$-$year period.

Interpret Brookwood Pines Hospital's debt$-$to$-$assets ratio.

BP$\text{'}$H$\text{'}$s debt$-$to$-$assets ratio for $2026$ indicates that about $32\mathrm{.}6$

cents of each dollar of assets is financed with

liabilities

A high ratio indicates

increased risk

of hot being able to meet debt payments when due.