Refer to the Metropolis Health System case study: see file attached
1. Set up a worksheet for the liquidity ratios
2. Compute the four liquidity ratios using the Chapter 28 MHS financial statements
MHS CASE STUDY
Financial Statements
• • Balance Sheet (Exhibit 28–1)
• • Statement of Revenue and Expense (Exhibit 28–2)
Exhibit 28–1Balance Sheet
Metropolis Health System Balance Sheet March 31, 2___
Assets
Current Assets
Cash and Cash Equivalents $1,150,000
Assets Whose Use Is Limited 825,000
Patient Accounts Receivable 7,400,000
(Net of $1,300,000 Allowance for Bad Debts)
Other Receivables 150,000
Inventories 900,000
Prepaid Expenses 200,000
Total Current Assets 10,625,000
Assets Whose Use Is Limited
Corporate Funded Depreciation 1,950,000
Held by Trustee Under Bond Indenture Agreement 1,425,000
Total Assets Whose Use Is Limited 3,375,000
Less Current Portion (825,000)
Net Assets Whose Use Is Limited 2,550,000
Property, Plant, and Equipment, Net 19,300,000
Other Assets 325,000
Total Assets $32,800,000
Liabilities and Fund Balance
Current Liabilities
Current Maturities of Long-Term Debt $525,000
Accounts Payable and Accrued Expenses 4,900,000
Bond Interest Payable 300,000
Reimbursement Settlement Payable 100,000
Total Current Liabilities 5,825,000
Long-Term Debt 6,000,000
Less Current Portion of Long-Term Debt (525,000)
Net Long-Term Debt 5,475,000
Total Liabilities 11,300,000
Fund Balances
General Fund 21,500,000
Total Fund Balances 21,500,000
Total Liabilities and Fund Balances $32,800,000
Exhibit 28–2Statement of Revenue and Expense
Metropolis Health System Statement of Revenue and Expense for the Year Ended March 31, 2___
Revenue
Net patient service revenue $34,000,000
Other revenue 1,100,000
Total Operating Revenue $35,100,000
Expenses
Nursing services $5,025,000
Other professional services 13,100,000
General services 3,200,000
Support services 8,300,000
Depreciation 1,900,000
Amortization 50,000
Interest 325,000
Provision for doubtful accounts 1,500,000
Total Expenses 33,400,000
Income from Operations $1,700,000
Nonoperating Gains (Losses)
Unrestricted gifts and memorials $20,000
Interest income 80,000
Nonoperating Gains, Net 100,000
Revenue and Gains in Excess of Expenses and Losses $1,800,000
