Keiser University The Heart Hospital Balance Sheet Math Problem

Question Description

Chapter 17. page 676

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

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