Using the income statement and balance sheet examples provided in Chapter 3 of the textbook, calculate the return on capital in 2019. How would knowing the return on capital help inform overall operations of the hospital?

TABLE 3-1 Hospital Income Statement

ABC HospitalAs of August 31, 2019

Income Statement ($,000)

Inpatient revenue $1,500,300

Outpatient revenue 430,320

Total patient revenue 1,930,620

Deductions, discounts, and allowances (1,000,000)

Net patient revenues $930,620

Total operating expenses 830,220

Operating income $100,400

Other income (donations, contributions, gifts) 5,200

Income from investments 15,001

Governmental appropriations 0

Auxiliary and non patient revenue 3,000

Total non patient revenue $23,201

Total other expenses $124,400

Net income or (loss) ($799)

TABLE 3-2 Hospital Balance Sheet

ABC HospitalAs of August 31, 2019 ($,000) Current Assets: Cash and Equivalents $325 Short-term Investments 175 Accounts Receivable, Net 550 Inventories 250 Prepaid Expenses 50 Total Current Assets $1,350

Long-term Assets: Land and Buildings, Net $750 Property and Equipment, Net 500 Investments 200 Total Long-term Assets 1,450 Total Assets $2,800

Liabilities and Equity/Net Assets Current Liabilities: Accounts Payable $360 Taxes and Other Payables 40 Accrued Liabilities 80 Other Current Liabilities 10 Total Current Liabilities $490

Long-term Liabilities: Long-term Debt $180 Other Long-term Obligations 20 Total Liabilities $690 Equity/Net Assets $2,110 Total Liabilities and Net Assets $2,800