Using the Balance Sheet and the Income Statement (Statement of Revenues and Expenses) calculate both the OPERATING MARGIN with formula operating income Loss/ total operating revenues and the RETURN ON TOTAL ASSETS using formula ebit/total assists Balance SheetAssetsCurrent AssetsCash and cash equivalentsAccounts receivable (not)InventoriesPrepaid InsuranceTotal Current AssetsProperty, Plant, and EquipmentLandBuildings (net)Equipment (net)Net Property, Plant, and EquipmentOther AssetsDecember 31, 2002$190,000250,00025,0005.000$470,000360,000133,000$963,000$345,000200,000$545,000418,000$963,000$100,0000260,000Investments$133.000Total Other AssetsTotal AssetsLiabilities and Fund BalanceCurrent LiabilitiesCurrent maturities of long-term debt$52.000Accounts payable and accrued expenses 293.000Total Current LiabilitiesLong-Term Debt$252,000Less Current Maturities of Long-Term Debt (52.000)Net Long-Term DebtTotal LiabilitiesFund BalancesUnrestricted fund balance$418.000Restricted fund balanceTotal Fund BalancesTotal Liabilities and Fund BalanceStatement of Revenue and ExpensesFor the Year EndingDecember 31, 20x2RevenueNet patient service revenue$2,000,000Total operating revenueOperating ExpensesMedical/surgical services$600,000Therapy services860,000Other professional services80,000Support services220,000General services65,000Depreciation40,000Interest20,000 $1,885,000Total operating expensesIncome from Operations$115.000Nonoperating Gains (Losses)Interest Income$5,000Net nonoperating gains5,000Revenue and Gains in Excess ofExpenses and Losses$120.000Increase in Unrestricted Fund Balance$120,000$2,000,000470,000Current Assets345,000 Current Liabilities=1.3622. Quick Ratio190,000+250,000345,000- 1.275Step 11,885,000(40,000)1/1.845.0001.845.000365-5,055Step 21. Current RatioStep 3190,0005,055= 37.5 daysStep 12.000.00090%1,800,000Step 21.800.000365= 4,931Step 3250,0004,931-50.7 daysCash and Cash Equivalent+Net ReceivablesCurrent Liabilities3. Days Cash on Hand (DCOH)Unrestricted Cash and Cash EquivalentsCash Operating Expenses divided bydays in period (365)Percent of Credit RevenuesInformation obtained elsewhere4 Days ReceivablesNat ReceivablesNet Credit Revenue divided by #days in period (365)

Name: Using the Balance Sheet and the Income Statement (Statement of Revenue
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Description: Using the Balance Sheet and the Income Statement (Statement of Revenues and Expenses) calculate both the OPERATING MARGIN with formula operating income Loss/ total operating revenues and the RETURN ON TOTAL ASSETS using formula ebit/total assists

Operating Margin Ratio: Operating income/Total Operating Revenue =115,000/2,000,000 = 0.0575 = 5.75%

Answered: Using the Balance Sheet and the Income…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Using the Balance Sheet and the Income Statement (Statement of Revenues and Expenses) calculate both the OPERATING MARGIN with formula operating income Loss/ total operating revenues and the RETURN ON TOTAL ASSETS using formula ebit/total assists

Balance Sheet
Assets
Current Assets
Cash and cash equivalents
Accounts receivable (not)
Inventories
Prepaid Insurance
Total Current Assets
Property, Plant, and Equipment
Land
Buildings (net)
Equipment (net)
Net Property, Plant, and Equipment
Other Assets
December 31, 2002
$190,000
250,000
25,000
5.000
$470,000
360,000
133,000
$963,000
$345,000
200,000
$545,000
418,000
$963,000
$100,000
0
260,000
Investments
$133.000
Total Other Assets
Total Assets
Liabilities and Fund Balance
Current Liabilities
Current maturities of long-term debt
$52.000
Accounts payable and accrued expenses 293.000
Total Current Liabilities
Long-Term Debt
$252,000
Less Current Maturities of Long-Term Debt (52.000)
Net Long-Term Debt
Total Liabilities
Fund Balances
Unrestricted fund balance
$418.000
Restricted fund balance
Total Fund Balances
Total Liabilities and Fund Balance
Statement of Revenue and Expenses
For the Year Ending
December 31, 20x2
Revenue
Net patient service revenue
$2,000,000
Total operating revenue
Operating Expenses
Medical/surgical services
$600,000
Therapy services
860,000
Other professional services
80,000
Support services
220,000
General services
65,000
Depreciation
40,000
Interest
20,000 $1,885,000
Total operating expenses
Income from Operations
$115.000
Nonoperating Gains (Losses)
Interest Income
$5,000
Net nonoperating gains
5,000
Revenue and Gains in Excess of
Expenses and Losses
$120.000
Increase in Unrestricted Fund Balance
$120,000
$2,000,000
470,000
Current Assets
345,000 Current Liabilities
=1.362
2. Quick Ratio
190,000+250,000
345,000
- 1.275
Step 1
1,885,000
(40,000)
1/1.845.000
1.845.000
365
-5,055
Step 2
1. Current Ratio
Step 3
190,000
5,055
= 37.5 days
Step 1
2.000.000
90%
1,800,000
Step 2
1.800.000
365
= 4,931
Step 3
250,000
4,931
-50.7 days
Cash and Cash Equivalent+
Net Receivables
Current Liabilities
3. Days Cash on Hand (DCOH)
Unrestricted Cash and Cash Equivalents
Cash Operating Expenses divided by
days in period (365)
Percent of Credit Revenues
Information obtained elsewhere
4 Days Receivables
Nat Receivables
Net Credit Revenue divided by #days in period (365)

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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