Perform a Du Pont analysis on the Heart Hospital. Assume that the industry average ratio are as
Question:
Perform a Du Pont analysis on the Heart Hospital. Assume that the industry average ratio are as follows:
Total margin 15.0%
Total asset turnover 1.5
Equity multiplier 1.67
Return of Equity 37.6%
B-Calculate and interpret the following ratios for the Heart Hospital
Industry Average
Return of assets 22.5%
Current ratio 2.0
Days of cash on hand 85 days
Average collection period 20 days
Debt ratio 40%
Debt-to-equity ratio 0.67
Times interest earned 5.0
Fixed asset turnover ratio 1.4
Expert Answer:
