WORKING CAPITAL, RATIOS, VERTICAL ANALYSIS

Question 1

___ Analysis is a common approach to analyzing finical statements.

1. Current Ratio Analysis
2. Quick Ratio
3. Average Period Analysis
4. None of the above

Answer 1

Current Ratio Analysis

Question 2

To phrase a CURRENT RATIO you would figure___.

1. Current Ratio = Current Liabilities divided by Current Assets (CR=CL/CA)
2. Current Ratio = Current Assets divided by Current Liabilities (CR=CA/CL)
3. Current Ratio = Both 1 & 2
4. None of the above

Answer 2

Current Ratio = Current Assets divided by Current Liabilities (CR=CA/CL

Question 3

Current assets of SNF L is $403,898 and Current liabilities is $367,000. What is the Current Ratio?

1. .80
2. .10
3. 1.1
4. .85

Answer 3

1.1

Question 4

TRUE OR FALSE.

The QUICK RATIO is similar to the current ratio but is more rigorous.

Answer 4

TRUE

Question 5

To phrase a QUICK RATIO you would figure ___.

1. Quick Ratio= (Cash + Acct. Rec) divided by Liabilities
2. Quick Ratio= (Liabilities + Cash + Rec.) divided by Assets
3. Quick Ratio= (Cash + Acc. Rec + Mkt’ble sec.) divided by Current Liabilities
4. None of the above

Answer 5

Quick Ratio = (Cash + Acc. Rec. + Mkt’ble sec.) divided by Current Liabilities

Question 6

The average collection period ratio shows the average ___.

1. Lag time of accounts receivable
2. Lag time of Marketable Securities
3. Lag time of accounts payable
4. None of the above

Answer 6

Lag time of accounts receivable

Question 7

To phrase an AVERAGE COLLECTION PERIOD RATIO you would know ___.

1. 365 divided by Acc. Pay
2. 365 x Acc. Rec. divided by Net operating revenues
3. 365 x Acc. Pay divided by Cash on hand
4. None of the above

Answer 7

365 x Acc. Rec. divided by Net operating Revenues

Question 8

The average collection period for a SNF with a majority of publicly paid-for residents is ___.

1. 30 days
2. 58 days
3. 60 days
4. 120 days

Answer 8

58 days

Question 9

A ___ is the accounts payable average payment period. This shows the average number of days used to pay creditors.

1. Related Ratio
2. Special Ratio
3. Defined Ratio
4. None of the above

Answer 9

Related Ratio

Question 10

To phrase an AVERAGE PAYMENT PERIOD you know ___.

1. 30 divided by Acct. Rec. times Expenses
2. 180 times Acct. Pay divided by Expenses
3. 365 times Acct. Pay divided by Supplies Expense
4. None of the above

Answer 10

365 times Acct. Payable divided by Supplies Expenses

365 x Acct. Pay/Supplies Expenses

Question 11

The ___ margin is the proportion of revenues earned to the amount of expenses used to earn those revenues.

1. Net Operating Margin
2. Payment Option Margin
3. Delayed Period Margin
4. None of the above

Answer 11

NET OPERATING MARGIN

Question 12

TRUE OR FALSE

A low operating margin may indicate that rates for services should be raised or expenses in the facility reduced.

Answer 12

TRUE

Question 13

The debt-to-equity ratio is defined as ___.

1. Acct. Pay to Acct. Rec.
2. A measure of the long-run liquidity of the SNF
3. 1&2
4. None of the above

Answer 13

A measure of the long-run liquidity of the SNF

Question 14

Figure the DEBT-TO-EQUITY ratio for SNF C.   You know the following:
Long-term debt = $4,135,202
Total equity = $3,529,508
1. 1.0
2. 1.91
3. 1.17
4. 2.17

Answer 14

1.17

Question 15

To figure the Average length of stay the administrator would formulate which of the following?

1. Total Patient days in the year divided by # of admissions in the year
2. Total patient days in the year times the # of admissions in the month
3. Total patient days in the month divided by 365
4. None of the above

Answer 15

Total Patient days in the year divided by # of admissions in the year

Question 16

To figure the Percent of occupancy the administrator would write the formula as ___.

1. % of occupancy= Average monthly census divided by # of beds
2. % of occupancy= Average daily census divided by # of patients
3. % of occupancy= Average daily census divided by # of bed
4. None of the above

Answer 16

% of occupancy = Average daily census divided by # of beds

Question 17

FTE is defined as ___.

1. Full-time Expense
2. Full-time Equivalent a position that only works 5 days a week
3. Full-time Equity
4. None of the above

Answer 17

Full-time Equivalent a position that only works only 5 days a week

Question 18

To figure the Full time equivalent of a facility you would ___.

1. FTE = Total # Nursing hours divided by 5
2. FTE = Total # All employees divided by 7
3. FTE=Total # hrs worked or budgeted divided by 40 (An FTE is a position that only works 5 days/week
4. None of the above

Answer 18

FTE = Total # hrs worked or budgeted divided by 40

FTE = Total # hrs worked (budgeted)/40