1. Using the data in the Sample Balance Sheet, calculate the current ratio, quick ratio, and the debt ratio
2. What information do these ratios provide?
3. If you were concerned about the result, what advice would you have for this organization?
4. In what ways could these ratios be negatively impacted?
5. When assessing the results of these ratios, what advice would you have for this organization if it was considering securing financing for a major capital expense?

Sample Balance Sheet 3/31/17 3/31/16 Change 1Year Growth Current Assets Cash and investments (savings/checking) 80,000 56,800 23,200 'l'40% Patient revenue (money owed to organization) 472,000 370,120 101,880 'l'26% Inventory (on the shelf) 16,400 15,200 1,200 'i'8% Subtotal 568,400 442,120 125,280 (29% Less: Bad debt (57,200) (77,250) 20,050 4,26% Charitable allowance (14,100) (13,680) (420) 'i'3% Contractual allowance (269,300) (233,750) (35,550) 'l'15% Subtotal (340,600) (324,680) (15,920) (5% Total Current Assets 227,800 117,440 110,360 'l'94% Fixed Assets Land 29,000 27,500 1,500 'i'5% Buildings (plant) 805,000 805,000 0 No change Equipment 610,000 624,000 (14,000) 02% Construction in progress 37,000 28,000 9,000 'l'32% Total Fixed Assets 1,481,000 1,484,5000 (3,500) 4,02% Less accumulated depreciation (880,800) (810,200) (70,600) 19% Net Fixed Assets 600,200 674,300 (74,100) 4,11% Total Assets 828,000 791,740 36,260 'l'5% Current Liabilities Accounts payable salaries, supplies, pharm 36,560 27,600 (8960) 'l'32% Accrued compensation and benefits 10,900 8,280 (2,620) 'l'32% Accrued liabilities (interest, contracts) 2,520 2,960 440 115% Current portion of longterm debt 8,350 9,000 650 17% Subtotal 58,330 47,840 (10,490) (22% Long-Term Liabilities Bonds payable 38,000 37,000 (1,000) 'l'3% Mortgage payable 2,100 1,900 (200) 'l'11% Subtotal 40,100 38,900 (1,200) 'l'3% Total Current Liabilities 98,430 86,740 (11,690) 'l'13% New Worth (Assets Liabilities) 729,570 705,000 24,570 'l'3% Total Liabilities and Net Worth 828,000 791,740 36,260 'i'5%