Scripps Health and Affiliates Consolidated Statements of Financial Position Sept

Question

Scripps Health and Affiliates Consolidated Statements of Financial Position September 30 2017 016 Assets Current assets: s 356,903 S 314,891 302,622 12,103 150,729 780,345 Cash and cash equivalents Patient accounts receivable, net 368,899 12,557 890,564 215,917 Assets limited as to use Other current assets Total current assets Assets limited as to use Investments Property and equipment, net 205,636 2,313,349 2,188,999 1,768,538 1,672.735 105.804 103,261 Other assets Total assets Liabilities and net assets Current liabilities: Current portion of debt Accounts payable Accrued liabilities S 33,270 158,964 139,428 312,879293.786 592,178 109,219 Total current liabilities 455,368 Long-term debt, less current portion Other liabilities Total liabilities 994,604 118.516 1,568,488 898,438 120,451 1,611,067 Net assets: Unrestricted: Controlling interests 3,518,942 3,140.404 3,184 3,522,3343,143,588 109,016 Non-controlling interests in subsidiaries 3,392 Temporarily restricted Permanently restricted 115,727 87,623 Total net assets Total liabilities and net assets 3.725,684 3,339,y09 S 5.294.172 S 4.950.976 See accompanying notes 1709-2404157

Explanation / Answer

The financial ratios that I have used for Scripps (along with their interpretation) are provided below:

1. Debt to equity ratio = Total liabilities/shareholder’s equity

Here instead of shareholder’s equity net assets will be used.

Here the debt to equity ratio declined to 42.10 % in 2017 compared to 48.24% in 2016. This indicates a lower use of financial leverage by the organization and hence a cleaning up of the balance sheet of the organization.

2. Current ratio = current assets/current liabilities

The current ratio of the organization has increased in 2017 to 1.96 and this indicates an increasing short term liquidity position of the company.

3. Profit margin = excess of revenue over expenses/operating revenue

Profit margin for the organization increased in 2017 to 11.99% compared to 9.7% in 2016. Increasing margins augurs well for the organization as it means that it is able to generate higher profits per dollar of revenue.

4. Capital spending = capital expenditures/annual depreciation expenses

Capital expenditure figures are provided in the cash flow statement under the cash flow from investing activities heading.

We can see that capital spending is increasing for the organization and this can mean that the organization is adding more activities and undertaking expansion. This will lead to higher revenue generation in the future for the organization.

5. Days cash on hand = cash on hand/((operating expenses - non cash expenses)/365)

The abobe numbers indicates that the company's liqudity has improved and it has higher cash balance in 2017 to pay for its operating expenses. In 2017 the company has a cash balance equivalent to 48.42 days, higher than the 43.85 days figure of 2016.

From the above we can see that the financial position of Scripps has improved in 2017 compared to 2016 and this means that the organization has done well from an operational and financial point of view.

2017 2016 Total liabilities 1,568,488.00 1,611,067.00 Total net assets 3,725,684.00 3,339,909.00 Debt to equity ratio 42.10 48.24

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