Financial Analysis Calculations

Scenario

In your new role as comptroller of the hospital, your CFO has asked you to prepare a financial analysis by evaluating a medical supply company, Hillside, Inc., that the hospital is considering purchasing. You will use its balance sheet and income statement to calculate several financial ratios. You’ll demonstrate your financial analysis skills and make final recommendations as to whether the hospital should purchase Hillside, Inc. to improve the availability of medical supplies to the hospital.

Assessment Deliverable

Access and complete 

Financial Analysis Calculations Worksheet

 (contains Parts 1 and 3) and 

Financial Ratio Calculations

(contains Part 2) in the following order using the prompts provided in the documents:

• Financial Analysis Calculations Worksheet, Part 1: Matching Questions
• Financial Ratio Calculations, Part 2: Financial Ratio Calculations
• Financial Analysis Calculations Worksheet, Part 3: Financial Performance Summary

Financial Ratio Calculations

information in cells A3 through D19 and

information in cells A21 through B38 to complete

in cells A4

through B57. This is the only tab in this file, and it is Part 2 of the Wk 4 Summative Assessment: Financial Analysis Calculations.

Table 1: Hillside, Inc. Balance Sheet ($ in Millions)
Table 2: Hillside, Inc. Income Statement ($ in Millions)
Depreciation

0

Table 3: Financial Ratio Calculations

		Use	Table 1: Hillside, Inc. Balance Sheet ($ in Millions)	Table 2: Hillside, Inc. Income Statement ($ in Millions)	Table 3: Financial Ratio Calculations	0
ASSETS	Assets Information	LIABILITIES	Liabilities Information
Cash & Marketable Securities	449.90	Accounts Payable	1,611.20
Accounts Receivable	954.80	Salaries Payable	225.20
Inventories	3,645.20	Other Current Liabilities	1,118.80
Other Current Assets	116.60	Total Current Liabilities	2,955.20
Total Current Assets	5,165.27
Other Liabilities	693.40
Machinery & Equipment	1,688.90
Land	1,129.70	Total Liabilities	3,648.60
Buildings	2,348.40
	Depreciation	(575.60)	SHAREHOLDER’S EQUITY	Shareholder’s Equity Information
Property, Plant, and Equipment (Net)	4,591.40	Common Stock	828.50
Other Long-Term Assets	120.90	Retained Earnings	5,401.70
Total Long-Term Assets	4,712.30	Total Shareholder’s Equity	6,230.20
Total Assets	9,877.57	Total Liabilities & Equity	9,878.80
Revenue	28,681.10
Cost Of Goods Sold	20,768.80
Gross Profit	7,912.30
Operating Expenses:	Operating Expenses Information
Selling, General & Admin.	5,980.80
307.30
Operating income	1,624.20
Interest
Other Expense (Income)	(13.10)
Income Before Taxes	1,637.30
Income Taxes	618.10
Net Income	1,019.20
Number of Common Stock
Shares Outstanding	1,032,271
Calculate 3 Liquidity Ratios	Liquidity Ratios Answers
Current Ratio (times)	Input the current ratio.
Quick Ratio (times)	Input the quick ratio.
Average Payment Period (days)	Input the average payment period.
Calculate 3 Asset-Management Ratios	Asset-Management Ratios Answers
Total Asset Turnover (times)	Input the total asset turnover.
Average Collection Period (days)	Input the average collection period.
Inventory Turnover (times)	Input the inventory turnover.
Calculate 2 Financial Leverage Ratios	Financial Leverage Ratios Answers
Total Debt to Total Assets	Input the debt to total assets.
Equity Multiplier (times)	Input the equity multiplier.
Calculate 5 Profitability Ratios	Profitability Ratios Answers
Operating Profit Margin	Input the operating profit margin.
Net Profit Margin	Input the net profit margin.
Return on Total Assets	Input the return on total assets.
Return on Equity	Input the return on equity.
Earnings per Share	Input the earnings per share.

&”Arial,Regular”&10 Wk 4 Financial Performance Worksheet
HCS/385 v4
Page &P of &N

&”Arial,Regular”&10HCS/385 v4

&”Arial,Regular”&8Copyright© 2020 by University of Phoenix. All rights reserved.

&”Arial,Regular”&8Copyright© 2020 by University of Phoenix. All rights reserved.

HCS/385 v7

Financial Analysis Calculations Worksheet

HCS/385 v7

Page 2 of 2

Financial Analysis Calculations Worksheet

Complete Parts 1, 2, and 3 using the provided prompts.

Part 1: Matching Questions

Match definitions A–J with the financial ratio question it corresponds to in the

Financial Ratio Questions

and

Definitions

Table. Do this by placing the letter of the definition in the Definitions column.

A. Indicates the desired level of performance an organization wants to compare itself with

B. Acid test ratio

C. Ratio analysis

D. Types of financial ratios

E. An expression of the relationship between two numbers as a single number

F. Operating margin

G. Current assists divided by current liabilities

H. Days in accounts receivable

I. Measures how organization’s assets are financed and how able the organization is to pay for new debt

J. Measures how productive the fixed assets of the business are in generating operating revenues

Financial Ratio Questions and Definitions Table

Financial Ratio Questions	Definitions
1. What is a ratio analysis?
2. What are liquidity, profitability, activity, and capital structure?
3. What is current ratio?
4. What does the term benchmark mean?
5. Which financial ratio provides the most stringent test of liquidity?
6. What is the term average collection period also known as?
7. Three approaches are commonly used to analyze financial statements: horizontal analysis, vertical analysis, and which other approach?
8. Which term refers to measuring profits earned from the organization’s main line of business?
9. What is a fixed asset turnover ratio?
10. What is capital structure ratio?

Part 2:

Financial Ratio Calculations

Complete
Financial Ratio Calculations in the Microsoft® Excel® file using the prompts provided.

Part 3: Financial Performance Summary

In the space provided, write a 150- to 350-word summary of your financial analysis from Part 2: Financial Ratio Calculations. Include the following in your summary:

· Make final recommendations as to whether the hospital should move forward with the purchase of Hillside, Inc. to improve the availability of medical supplies to your hospital.

· Address the financial outlook of Hillside, Inc. (i.e., Is it positive or negative?). Use the financial ratios to support your answer.

· Cite and reference for any sources used and format them according to APA guidelines.

Copyright 2023 by University of Phoenix. All rights reserved.

Copyright 2023 by University of Phoenix. All rights reserved.

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