Accounting Case Study

Do  problem 17.7 . The HEART Hospital Balance Sheet , Sept 30, 2015.

(a). Perform a Du point analysis on the Heat Hospital. Assume that the industry average ratios are  follows:

Total margin             15%

Total asset turnover  1.5

Equity multiplier        1.67

Return on equity ( ROE) 37.6%

(b). Calculate  and interpret the following ratios for The Heart Hospital:

Industry AVERAGE

Return on ASSETYS (ROA)                                                             22.5%

Current  ratio                                                                                       2.00

Days cash on hand                                                                            85 days

Average  collection period                                                               20 days

Debt ratio                                                                                             40%

Debt to equity ratio                                                                            0.67

Time interest earned ( TIE) ratio                                                       5.00

Fixed asset turnover ratio                                                                   1.4