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  1. Review the following table:

XYZ Hospital

Balance Sheet

December 31, 20xx

DescriptionAmount
Current AssetsCash and investments (savings/checking)$80,000
Patient revenue (money owed to hospital)$472,000
Inventory (on the shelf)$16,400
Subtotal$568,400
Less
Bad debt($57,200)
Charitable allowance($14,100)
Contractual allowance($269,300)
Subtotal($340,600)
Total Current Assets$227,800
Fixed AssetsLand$29,000
Buildings (plant)$805,000
Equipment$610,000
Construction in progress$37,000
Total Fixed Assets$1,481,000
Less accumulated depreciation($880,800)
Net Fixed Assets$600,200
Total Assets$828,000
Current LiabilitiesAccounts payable salaries, supplies, pharmaceutical$36,560
Accrued compensation and benefits$10,900
Accrued liabilities (interest, physician contracts)$10,870
Total Current Liabilities$58,330
DebtLong-term debt$38,000
Short-term debt$2,100
Total Debt$40,100
Total Liabilities (Total Current Liabilities + Debt)$98,430
Net Worth (Assets − Liabilities)$729,570
Total Liabilities and Net Worth$828,000
  1. Complete the following based on information provided in the table:
  1. Calculate the current ratio, quick ratio, and debt ratio.
  2. What information do each of these ratios provide?
  3. For each of the three ratios, give one way each ratio could be positively impacted.
  4. For each of the three ratios, give one way each ratio could be negatively impacted.
  5. For each ratio you calculated above, does the value of the ratio indicate a good or poor financial situation for this organization?  Explain your conclusion for each of the ratios. 
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