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# Ratio Calculations

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I have attached two documents the informational sheets that are supposed to help in answering these questions.

Acute Care Hospitals,
1999

Current ratio 2.07
Inventory turnover 50.35
Total asset turnover 1.01
Days in accounts receivable (collection period) 74.26
Debt financing percentage 43.66
Long-term debt to equity (percent) 31.16
Times interest earned 2.37
Cash flow to total debt (percent) 15.48
Return on assets 2.01
Return on equity 5.46
Source: Cleverly

Ratio Analysis

Resource: Table 4-2 on p. 71 of the text

Due Date: Day 4 [Individual forum]

Compute the following ratios from Arcadia Hospital's 2005 financial statements:

Current ratio
Total asset

Compare these ratios with the 1999 median for all U.S. acute care hospitals listed in Table 4-2.
Compute the following ratios from Arcadia Hospital's 2005 financial statements:

Asset/equity
Long-term debt/equity
Total margin

Explain whether the ratios are leverage or profitability ratios. If a leverage ratio, is it coverage or capital structure? What is the difference between the two? If a profitability ratio, discuss why it is not completely satisfactory for measuring an organization's profitability. What can these ratios tell us about Arcadia?