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Ford 2011, 2012 Financial ratios assignment
Sheet
1
| Financial Ratios Assignment | ||||||
| Instructions | ||||||
| For each question, there are three required parts: | ||||||
| (1) calculate the ratio for both years, | 2012 | 2011 | ||||
| (2) comment on whether performance has gotten better or worse based on the ratio. | ||||||
| (3) provide a direct answer to the question. | ||||||
| Henry Ford Health System • 2012 System Report | ||||||
| Note: Components of the financial statements attributable to Health Alliance Plan, the wholely owned HMO of the Henry Ford Health System are labeled (HAP) | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||
| December 31, 2012 and 2011 (In Thousands) | ||||||
| ASSETS | ||||||
| Current Assets: | ||||||
| Cash and cash equivalents | 266,960 | 226,068 | ||||
| Cash and cash equivalents (HAP) | 209,028 | 118,010 | ||||
| Short-term investments | 16,211 | 14,261 | ||||
| Net Patient care receivables | 174,534 | 195,592 | ||||
| Health care premium receivables (HAP) | 43,020 | 50,479 | ||||
| Other current assets | 208,312 | 175,351 | ||||
| Total Current Assets | 918,065 | 779,761 | ||||
| LONG-TERM INVESTMENTS | 343,112 | 460,767 | ||||
| ASSETS LIMITED AS TO USE | 608,390 | 470,480 | ||||
| ASSETS LIMITED AS TO USE (HAP) | 249,842 | 329,399 | ||||
| JOINT VENTURES AND OTHER ASSETS | 116,726 | 100,628 | ||||
| PROPERTY, PLANT AND EQUIPMENT | 2,815,104 | 2,628,995 | ||||
| (Accumulated Depreciation) | (1,596,587) | (1,467,043) | ||||
| NET PROPERTY, PLANT AND EQUIPMENT | 1,218,517 | 1,161,952 | ||||
| TOTAL ASSETS | 3,454,652 | 3,302,987 | ||||
| LIABILITIES AND NET ASSETS | ||||||
| Current Liabilities | 430,943 | 374,483 | ||||
| Current Liabilities (HAP) | 270,435 | 259,328 | ||||
| Long-Term Debt | 817,971 | 827,923 | ||||
| Other Long-Term Liabilities | 497,828 | 481,157 | ||||
| TOTAL LIABILITIES | 2,017,177 | 1,942,891 | ||||
| NET ASSETS | 1,206,020 | 1,121,536 | ||||
| NET ASSETS (HAP) | 231,455 | 238,560 | ||||
| TOTAL LIABILITIES AND NET ASSETS | ||||||
| CONSOLIDATED STATEMENT OF OPERATIONS | ||||||
| UNRESTRICTED REVENUE | ||||||
| Patient service revenue | 2,224,038 | 2,115,846 | ||||
| (Provision for uncompensated services) | (158,729) | (147,992) | ||||
| Net patient service revenue | 2,065,309 | 1,967,854 | ||||
| Health care premiums (HAP) | 1,875,087 | 1,791,335 | ||||
| Investment income | 66,150 | 26,186 | ||||
| Other income | 456,943 | 189,051 | ||||
| Total Unrestricted Revenue | 4,463,489 | 3,974,426 | ||||
| EXPENSES | ||||||
| Salaries, wages, and employee benefits | 1,356,884 | 1,299,574 | ||||
| Salaries, wages, and employee benefits (HAP) | 145,758 | 140,379 | ||||
| Healthcare provider expense (HAP) | 1,380,862 | 1,398,888 | ||||
| Supplies and other expenses | 1,036,860 | 693,106 | ||||
| Supplies and other expenses (HAP) | 326,634 | 228,289 | ||||
| Depreciation and amortization | 168,568 | 145,278 | ||||
| Total Expenses | 4,415,566 | 3,905,514 | ||||
| EXCESS OF REVENUE OVER EXPENSES | 26,090 | 45,133 | ||||
| EXCESS OF REVENUE OVER EXPENSES (HAP) | 21,833 | 23,779 | ||||
| UNUSUAL ITEMS | 7,425 | (4,263) | ||||
| 55,348 | 64,649 | |||||
| 1. Calculating the Total Margin, separately for (a) Health Alliance Plan and (b) the Henry Ford Health System excluding Health Alliance Plan, does it appear that Henry Ford Health System has “the wherewithal to go it alone”? | ||||||
| 2. Calculated Days Cash on Hand separately (a) using current asset accounts only and (b) including long-term investments and assets limited as to use, do you think that Henry Ford Health System has the liquidity to pay their bills? | ||||||
| 3. Based upon the Debt Ratio, do you think that Henry Ford would have the ability to borrow money if they need to make additional investments associated with the Affordable Care Act? | ||||||
| 4. Based upon the Average Age of Plant, do you think that they are keeping pace with technology? | ||||||
| 5. Based upon the Current Ratio, do you think that they are able to meet their short term obligations and do you foresee any liquidity issues? | ||||||
| 6. Calculate the Return on Assets, separately for (a) Health Alliance Plan and (b) the Henry Ford Health System excluding Health Alliance Plan, does it appear that Henry Ford Health System has “the wherewithal to go it alone”? |