Keiser University The Heart Hospital Balance Sheet Math Problem
Question Description
Chapter 17. page 676
Problem 17.7 – The HEART Hospital Balance Sheet , Sept 30, 2015.
(a). Perform a Du point analysis on the Heat Hospital . Assume that the industry average ratios are follows:
Total margin 15%
Total asset turnover 1.5
Equity multiplier 1.67
Return on equity ( ROE) 37.6%
(b). Calculate and interpret the following ratios for The Heart Hospital:
Industry AVERAGE
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Return on ASSETYS (ROA) 22.5%
Current ratio 2.00
Days cash on hand 85 days
Average collection period 20 days
Debt ratio 40%
Debt to equity ratio 0.67
Time interest earned ( TIE) ratio 5.00
Fixed asset turnover ratio 1.4
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