Calculate and show the debt service coverage ratio for these two hospitals. Which would be more likely to get a loan using debt financing? Why? Which would be more likely to use equity financing? Why? Hospital 1 Hospital 2 Current Liabilities $145,685,000 $224,790,000 Excess of Revenue over Expenses $33,000,000 $3,500,000 Depreciation and Amortization $4,010,101 $7,645,000 Annual Debt Service Payments $6,435,000 $13,000,000 Current Assets $184,500,000 $223,400,000 Interest $2,750,000 $4,125,000 Principal Payments $10,000,000 $15,000,000

Calculate and show the debt service coverage ratio for these two hospitals. Which would be more likely to get a loan using debt financing? Why? Which would be more likely to use equity financing? Why? Hospital 1 Hospital 2 Current Liabilities $145,685,000 $224,790,000 Excess of Revenue over Expenses $33,000,000 $3,500,000 Depreciation and Amortization $4,010,101 $7,645,000 Annual Debt Service Payments $6,435,000 $13,000,000 Current Assets $184,500,000 $223,400,000 Interest $2,750,000 $4,125,000 Principal Payments $10,000,000 $15,000,000

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 4PA: Jefferson Memorial Hospital is an investment center as a division of Hospitals United. During the...

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