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Financial Assessment in Healthcare Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. What's the best explanation of a profitability ratio?

Question 2 2. Your retail business has total assets valued at $12,000,000 and earned $975,000 in net income during the same time period. What is its return on assets?

Use this material to answer questions #3 through #4

Vandox Company Ltd is a company looking to secure a loan with a commercial bank.

The following details are available:

1. Interest expense = $58,000

2. Earnings = $215,000

3. Total liabilities = $143,000

4. Total assets = $450,000

5. Total equity = $29,000

Question 3 3. Calculate the interest coverage ratio.

Use this material to answer questions #3 through #4

Vandox Company Ltd is a company looking to secure a loan with a commercial bank.

The following details are available:

1. Interest expense = $58,000

2. Earnings = $215,000

3. Total liabilities = $143,000

4. Total assets = $450,000

5. Total equity = $29,000

Question 4 4. Calculate the debt-to-equity ratio.

Question 5 5. _____ is NOT a healthcare issue that can be modeled through discrete event simulation?

Page 2

Question 6 6. What makes a discrete event simulation discrete?

Question 7 7. What is the formula for calculating percentage change year over year in accounting?

Question 8 8. When analyzing trends with comparative financial statements, if the percentage change increases, which accounts are impacted positively?

Question 9 9. XYZ Industry currently has $475,000 in assets, and their liabilities are $100,000. What is their current ratio?

Question 10 10. What is the debt ratio?

Page 3

Question 11 11. Which of the following is a computation used to measure a company's ability to pay its short-term debt?

Question 12 12.

What is the cash ratio for a company with $10,000 in the bank, $25,000 in the 30-day CDs, and $30,000 in current liabilities?

(Assume a 30-day CD is a cash equivalent.)

Question 13 13. Which of the following statements explain the analysis of the current ratio?

Question 14 14. XYZ Technology Firm is looking to buy 10,000 newly developed graphics cards to include in some of their products. Yet, they are a little short on cash. In order to fund this purchase order, XYZ can sell an unused warehouse in a moderately saturated market, an 18-wheeler truck used to transport products, or a fleet of updated computers they no longer use for business purposes. Which of those items most likely has the greatest liquidity?

Question 15 15. How is benchmarking used in healthcare organizations?

Page 4

Question 16 16. Jane wants to plan and implement benchmarking in the healthcare organization where she works, but she does not have access to reliable external data. What type of benchmarking should she use?

Question 17 17. When are fixed assets converted into cash?

Question 18 18. Which activity ratio uses accounts receivable on its calculation?

Question 19 19. Which was NOT a suggestion to protect against declining patient volume?

Question 20 20. Choose the best answer to define profit analysis.

Page 5

Question 21 21. Your company is trying to determine how competitive it is in the market, and it wants to design the strategic goals of the company. Company A is a company that is just as good as your company, while Company B is a much larger company that can be considered a leader of the industry with far greater revenue than yours. Which company should you compare your company with in the case of best practices benchmarking?

Question 22 22. John works for a large company that is trying to assess its business through benchmarking. He has been developing surveys and has been told to contact representatives of other companies to seek cooperation. Which stage of benchmarking is John's company in?

Question 23 23. Investors have invested a total of $1,000,000 in your company, which netted $82,500 in income during the same period. What is the return on investment during this period?

Question 24 24. Choose the best answer as it relates to a baseline ratio.

Question 25 25. While collecting data for a discrete event simulation, Janet met with the clinicians and nurses to create a database of variables for the study. This is _____.

Page 6

Question 26 26. Choose the best answer to define comparative financial statements.

Question 27 27. How are financial statement ratios calculated?

Question 28 28. What would a current ratio of 1 tell us about a company?

Question 29 29. What is a financial ratio?

Question 30 30. What important issue did the Institute of Medicine identify utilizing benchmarking?

Financial Assessment in Healthcare Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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