This is balance sheet and below is the income statement

Lehman Hospital
Income Statement
For Year Ended December 31, 2015
Revenues	$96,000,000
Expenses	94,000,000
Net Income	$2,000,000

Using the data from your balance sheet and the following income statement answer the following questions (5 points each).

Formula
Calculation
Answer

Compute the total profit margin ratio for 2015. Is this good if the industry average is 2.5 percent?

Compute the return on assets ratio for 2015. Is this good if the industry average is 8.3%?

Formula	See appendix B (attached) or text (p. 406) for formula
Calculation
Answer

Note: To find total assets (in profit margin formula) to compare to the industry average, the total assets average must be calculated for both years, therefore (2015 assets+2014 assets)/2 = total assets.

Compute the return on equity ratio for 2015. Is this good if the industry average is 5 percent?

Formula	See appendix B (attached) or text (p. 406) for formula
Calculation
Answer

Note: To find total equity (in return on equity formula) to compare to the industry average, the total equity average must be calculated for both years, therefore (2015 equity+2014 equity)/2 = total equity.

New Microsoft Office Excel Worksheet Microsoft Excel Insert page Layout Formulas Data Review view Home E AutoSum Wrap Text General Fill B I U EH A E E is EE Merge & Center v og Conditional Format as Cell Insert Delete Format Sort & Find & Formatting Table Styles 2 clear v Filter Select Paste Clipboard Numbe Cells Editing Fon gnment Styles Solution: Lehman Hospital Balance Sheet December 31 2015 2015 2014 Assets Property, Plant and Equipment 64,000,000 63,000,000 Current Assets 21,000,000 18,000,000 Total Assets 10 85,000,000 81,000,000 11 Liabilities and Net Assets (Equity) 12 13 Liabilities Current Liabilities 17,000,000 14,000,000 15 Bonds Payable 64,000,000 65,000,000 Total Liabilities 81,000,000 79,000,000 16 (Net Assets) Equity 4,000,000 17 2,000,000 Total Liabilities and Net Assets (Equity) 18 85,000,000 81,000,000 19 20 K 4 Sheet 14 Sheet 15 Sheet 16 Sheet17 Sheet 18 Sheet 19 Sheet 20 Sheet 21 sheet23 Ready 10:16 PM 12/15/2016