Create a horizontal and vertical analysis for the balance sheet and the income statement.

·         Profitability ratios

o    Asset turnover
o    Profit margin
o    Return on assets
o    Return on common stockholders’ equity

·         Solvency ratios

o    Debt to total assets
o    Times interest earned

Show your calculations for each ratio.
Patton – Fuller Community Hospital
Balance Sheet
2009 – 2008
(In Thousands)
(Unaudited)
2009 2008
Assets
Current Assets
Cash and Cash Equivalents $22,995 $41,851
Assets of Limited Use 27,594 41,851
Patient Accounts Receivable 59,787 37,666
(net of Allowance for Bad Debts 2009: $10,757   2008: $6,777)
Other Receivables — 87
(3rd party payer settlements)
Inventories 18,396 8,370
Prepaid Expenses 95 201
Total Current Assets $1,28,867 $1,30,026
Other Assets
Funded Depreciation $1,37,970 $1,67,404
Held under Bond Indenture 73,584 75,332
Property, Plant and Equipment, net 2,48,346 1,75,774
Total Assets $5,88,767 $5,48,535

Liabilities and Equity
Current Liabilities
Current portion of long-term debt $14,599 $4,185
Accounts payable, accrued expenses 9,198 4,185
Bond interest payable 10 10
Total Current Liabilities $23,807 $8,380
Other Liabilities
Long-term debt $4,52,945 $2,09,255
less: current portion of long-term debt 14,599 4,185
Net long-term debt $4,38,346 $2,05,069
Total Liabilities $4,62,153 $2,13,450
Equity
Common Stock, $ 0.01 par value $50 $50
10,000,000 shares authorized
5,000,000 shares outstanding
Additional paid-in capital 0 0
Retained Earnings (or “Net Worth” or “Unrestricted Fund Balance”) 1,26,564 3,35,035
Total Liabilities and Equity $5,88,767 $5,48,535
Note: Maximum Annual Debt Service
Bond interest payable $10 $10
Current portion of long term debt 14,599 4,185
Maximum Annual Debt Service $14,609 $4,195
Patton – Fuller Community Hospital
Statement of Revenue and Expense
2009 – 2008
(In Thousands)
(Unaudited)
2009 2008
Revenues
Net Patient Revenue $4,59,900 $4,18,509
Other Revenue 3,082 2,805
Total Revenues $4,62,982 $4,21,314

Expenses
Salaries and benefits $2,20,752 $2,14,129
Supplies 74,584 71,346
Physician and professional fees 1,10,376 1,07,065
Utilities 1,200 1,164
Other 1,840 1,785
Depreciation & Amortization 36,036 24,955
(non-cash expenses)
Interest 3,708 3,597
Provision for doubtful accounts 13,797 13,383
Total Expenses $4,62,293 $4,37,424

Operating Income 689 -16,110
Non-operating income (loss)
Investment income -62 264
Net Income $627 ($15,846)

Patton – Fuller Community Hospital
Statement of Retained Earnings and
Stockholders’ Equity
For the Year Ending December 31, 2009
(In Thousands)
(Audited)
2009 2008
Beginning Retained Earnings and Stockholders’ Equity $3,35,035 $4,54,612
Other Revenue -373 -15,846
Dividends Paid -2,09,098 -1,03,731
Ending Retained Earnings and Stockholders’ Equity $1,25,564 $3,35,035

Patton – Fuller Community Hospital
Statement of Cash Flows
2009 – 2008
(As of December 31)
(In Thousands)
(Audited)
2009 2008
Cash Flows From Operating Activities
Net Income (Loss) ($373) ($15,846)
Adjustments
Depreciation expense (non-cash) 36,036 28,118
Decrease in Assets of Limited Use 14,257 5
Increase in Patient Accounts Receivable -21,121 -801
Decrease in Other Receivables 87 –
Increase in Inventory -10,026 -51
Decrease in Prepaid Expenses 106 3
Increase in Accounts payable, accrued expenses 5,013 11
Net Cash Flow from Operations $23,979 $11,439

Cash Flows from Investing Activities
Decrease (Increase) in Funded Depreciation $29,434 $4,431
Held under Bond Indenture $1,748 –
Investment in Property, Plant and Equipment -72,572 -2
Net Cash Flows from Investing Activities ($41,390) $4,429

Cash Flows from Financing Activities
Proceeds of Long Term Debt (net of issuance costs) $1,97,239 $0
Change in Current portion of long-term debt $10,414 $8
Dividends Paid -2,09,098 -1,03,681
Net Cash Flows from Financing Activities ($1,445) ($1,03,673)

Net Increase (Decrease) in Cash and Cash Equivalents ($18,856) ($87,805)

Beginning Cash and Cash Equivalents $41,851 $1,29,656

Ending Cash and Cash Equivalents $22,995 $41,851
Patton – Fuller Community Hospital
Interim Statement of Income
2009
In 000’s
(Unaudited)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Revenues
Net Patient Revenue 46,450 41,940 43,001 35,598 31,821 25,404 25,530 37,531 39,136 40,626 46,968 45,894 4,59,900
Other Revenue 110 60 180 211 283 98 121 170 258 222 209 1,160 3,082
Total Revenues 46,560 42,000 43,181 35,809 32,104 25,502 25,651 37,701 39,394 40,848 47,177 47,054 4,62,982
–
Expenses ratio –
Salaries and benefits 0.48 22,296 20,131 20,641 17,087 15,274 12,194 12,255 18,015 18,785 19,501 22,545 22,029 2,20,752
Supplies 0.16 7,432 6,710 6,880 5,696 5,091 4,065 4,085 6,005 6,262 6,500 7,515 8,343 74,584
Physician and professional fees 0.24 11,148 10,066 10,320 8,544 7,637 6,097 6,127 9,008 9,393 9,750 11,272 11,015 1,10,376
Utilities flat rate 100 100 100 100 100 100 100 100 100 100 100 100 1,200
Other 0.02 186 168 172 142 127 102 102 150 157 163 188 184 1,840
“Depreciation & Amorization
(“”non-cash”” expenses)” flat rate 3,003 3,003 3,003 3,003 3,003 3,003 3,003 3,003 3,003 3,003 3,003 3,003 36,036
Interest 309 309 309 309 309 309 309 309 309 309 309 309 3,708
Provision for doubtful accounts 0.03 1,393 1,258 1,290 1,068 955 762 766 1,126 1,174 1,219 1,409 1,377 13,797
Total Expenses 45,867 41,745 42,715 35,949 32,497 26,631 26,747 37,716 39,182 40,544 46,341 46,359 4,62,293
–
Operating Income 693 255 466 -140 -392 -1,129 -1,095 -14 212 304 836 695 689
–
Non-operating income (loss) –
Investment income 22 22 22 22 22 22 22 22 22 22 -304 22 -62
–
Net Income 715 277 488 -118 -370 -1,107 -1,073 8 234 326 532 717 627