HCAD 760 FINAL PAPER 2025/2026 QUESTIONS WITH
ANSWERS TAGGED A+
✔✔In a not for profit corporation - ✔✔The entire amount of net income is reinvested in
the business
✔✔Inventories - ✔✔Current assets
✔✔Fixed assets - ✔✔Net property and equipment
✔✔Accrued expenses - ✔✔Current liabilities
✔✔Accounts payable - ✔✔Current liabilities
✔✔Net patient accounts receivable - ✔✔Current assets
✔✔Debt instruments with financing greater than one year - ✔✔Long term debt
✔✔A balance sheet contains information about an organization's - ✔✔Equity; liabilities;
assets
✔✔Examples of common current liabilities are - ✔✔Accrued expenses; accounts
payable; notes payable
✔✔Categories that are part of the statement of cash flows - ✔✔Investing activities;
financing activities; operating activities
✔✔Because current assets are expected to quickly be converted to cash, they are
important to an organization's - ✔✔Liquidity
✔✔Liabilities are considered - ✔✔Financial obligations
✔✔When a not for profit subtracts all its total liabilities from its assets, whatever remains
are the organization's - ✔✔Net assets
✔✔The basic accounting equation is: Assets = Liabilities - Equity - ✔✔False
✔✔Long term debt is defined as debt financing with maturities greater than 180 days -
✔✔False
✔✔The balance sheet reflects an organization's financial position at a specific point in
time - ✔✔True
, ✔✔Debt management ratio - ✔✔Assesses if the business using the right mix of debt
and equity
✔✔Asset management ratio - ✔✔Assesses if the business has the right amount of
assets for its patient volume
✔✔Profitability ratio - ✔✔Assesses if the business is generating sufficient profits
✔✔Liquidity ratio - ✔✔Assesses if the business can meet its cash obligations
✔✔Dupont analysis - ✔✔Summarizes and highlights an organization's financial
condition
✔✔Percentage change analysis - ✔✔Allows you to examine changes in the financial
statement year over year
✔✔Operating indicator analysis - ✔✔Focuses on operating data as compared to
financial statement data
✔✔Benchmarking - ✔✔Process of comparing a business's performance to selected
industry standards
✔✔Debt ratio - ✔✔Example of a capitalization ratio
✔✔Times interest earned (TIE) - ✔✔Example of a coverage ratio
✔✔Days cash on hand (DCOH) - ✔✔Example of a liquidity ratio
✔✔Operating margin (OM) - ✔✔Example of a profitability ratio
✔✔Average length of stay - ✔✔Inpatient days/total discharges
✔✔Profit per discharge - ✔✔Inpatient profit/total discharges
✔✔Salary per full time equivalent (FTE) - ✔✔Total salaries/total full-time equivalents
✔✔Occupancy rate - ✔✔Inpatient days/ (number of licensed beds x 365)
✔✔According to DuPont analysis, ROE can be calculated as the product of what three
financial ratios? - ✔✔Total margin; equity multiplier; total asset turnover
ANSWERS TAGGED A+
✔✔In a not for profit corporation - ✔✔The entire amount of net income is reinvested in
the business
✔✔Inventories - ✔✔Current assets
✔✔Fixed assets - ✔✔Net property and equipment
✔✔Accrued expenses - ✔✔Current liabilities
✔✔Accounts payable - ✔✔Current liabilities
✔✔Net patient accounts receivable - ✔✔Current assets
✔✔Debt instruments with financing greater than one year - ✔✔Long term debt
✔✔A balance sheet contains information about an organization's - ✔✔Equity; liabilities;
assets
✔✔Examples of common current liabilities are - ✔✔Accrued expenses; accounts
payable; notes payable
✔✔Categories that are part of the statement of cash flows - ✔✔Investing activities;
financing activities; operating activities
✔✔Because current assets are expected to quickly be converted to cash, they are
important to an organization's - ✔✔Liquidity
✔✔Liabilities are considered - ✔✔Financial obligations
✔✔When a not for profit subtracts all its total liabilities from its assets, whatever remains
are the organization's - ✔✔Net assets
✔✔The basic accounting equation is: Assets = Liabilities - Equity - ✔✔False
✔✔Long term debt is defined as debt financing with maturities greater than 180 days -
✔✔False
✔✔The balance sheet reflects an organization's financial position at a specific point in
time - ✔✔True
, ✔✔Debt management ratio - ✔✔Assesses if the business using the right mix of debt
and equity
✔✔Asset management ratio - ✔✔Assesses if the business has the right amount of
assets for its patient volume
✔✔Profitability ratio - ✔✔Assesses if the business is generating sufficient profits
✔✔Liquidity ratio - ✔✔Assesses if the business can meet its cash obligations
✔✔Dupont analysis - ✔✔Summarizes and highlights an organization's financial
condition
✔✔Percentage change analysis - ✔✔Allows you to examine changes in the financial
statement year over year
✔✔Operating indicator analysis - ✔✔Focuses on operating data as compared to
financial statement data
✔✔Benchmarking - ✔✔Process of comparing a business's performance to selected
industry standards
✔✔Debt ratio - ✔✔Example of a capitalization ratio
✔✔Times interest earned (TIE) - ✔✔Example of a coverage ratio
✔✔Days cash on hand (DCOH) - ✔✔Example of a liquidity ratio
✔✔Operating margin (OM) - ✔✔Example of a profitability ratio
✔✔Average length of stay - ✔✔Inpatient days/total discharges
✔✔Profit per discharge - ✔✔Inpatient profit/total discharges
✔✔Salary per full time equivalent (FTE) - ✔✔Total salaries/total full-time equivalents
✔✔Occupancy rate - ✔✔Inpatient days/ (number of licensed beds x 365)
✔✔According to DuPont analysis, ROE can be calculated as the product of what three
financial ratios? - ✔✔Total margin; equity multiplier; total asset turnover
