Drake 1 Mandy Drake Healthcare Accounting McCuistion 16 October 2013 Methodist Dallas Medical Methodist Dallas Medical began

serving north Te as since 1!2"# $t is no% gro%n into a &1& beds hos'ital including (ore than 2&0 'hysicians %ith e 'ertise in (ore than 60 (edical s'ecialties# Methodist Dallas Medical Center 'rovides )uality health care to (ore than 1"&*000 'atients 'er year# Methodist+s in'atient ,acilities consist o, the &1&bed ,lagshi' Methodist Dallas Medical Center .Methodist Dallas/0 the 2&1-bed Methodist Charlton Medical Center .Methodist Charlton/0 and the 112-bed Methodist Mans,ield Medical Center .Methodist Mans,ield/# Methodist also has 23 beds at Methodist Mc3inney* 10 beds at Methodist Hos'ital ,or 4urgery in Addison* and Methodist 5ichardson Medical Center# 6ooking at the inco(e in 2012* the net 'atient inco(e dro''ed ,ro( a high o, 7!60*!"0*000 in 2011 to 7"""*31"*000 .8igure 1#/ The o'erating inco(e revenue %as also lo%er in 2012* being at 7"26*010*000# The total o'erating e 'enses ,or 2012 %ere 7"2&*122*000* there,ore giving Methodist hos'ital an o'erating inco(e o, 760*&22*000 ,or 2012# The o'erating (argin is res'ectively at "#"190 the lo%est since 200! .8igure 2#/ The net non-o'erating inco(e ,or 2012 %as 73*&32*000 increasing drastically ,ro( the -71&*0&2*000 in 2011# The e cess inco(e ,or 2012 reached a lo% since 200! o, 761*120*0000 res'ectively having an e cess (argin o, 2#129# The net available ,or debt services %as 7121*20"*000* dro''ing 722*002*000 since 2011#

Drake 2 :hen looking at the li)uidity o, Methodist hos'ital syste(* it has increased over the 'ast 3 years# $n 2012* the unrestricted cash and invest(ents reached a high o, 7&"!*&12*000# The unrestricted days; cash on hand also reached a high o, 232#3 days# 6ooking at the liabilities 'ortion o, the balance sheet* the (ain 'ast ,inancial issues have included gro%ing long ter( debts .8igure 3/# 8ro( the year 200! to 2012* the total long debt has gro%n by 71&6*0!0# The long ter( debt %as a high co('any high o, 7312*1!6*000 ,or the year 2012# The debt burden ratio is only 2#6!9* the lo%est it has been since 200! %hile in 2010* the debt burden ratio reached a high o, 3#129# The long ter( debit ca'itali<ation 'ercent %as 22#&9* the highest it has been in the 'ast 3 years# $ believe that the Methodist Dallas Medical Hos'ital 4yste(;s inco(e %as lo%er and debt %as higher because o, the decision to build a ne% in'atient ,acility and 'lanned addition and e 'ansion o, their e(ergency de'art(ent* trau(a* and critical care s'aces at the =ush and 5enner hos'ital and converting the Ca('bell hos'ital to a 'ost acute care ,acility# Methodist also has about 7332#6 (illion in long-ter( bond debt# This includes 71&0 (illion o, Methodist+s 1!!2 debt as %ell as the 76! (illion debt ,ro( the 'urchase o, the 5ichardson ,acility# Methodist has about 711"#2 (illion in loans>notes>leases associated %ith its Mc3inney ,acility and Hos'ital ,or 4urgery# :ith the e 'ansion =ush and 5enner e 'ansion* $ believe the balance sheets %ill sho% an increase in debt* but the hos'ital %ill be able to kee' it at a stead rate %ith the issuance o, a 71&0*000 bond# As ,or the long ter( debts ,ro( all the other ,acilities* $ believe ,or the long ter( debits that they still have ,ro( 1!!2 and 2001* %ill stay the sa(e and not be 'aid o,,# $ learned that a hos'ital is going to have a lo%er inco(e %ith debt and still be in ,inancial %ell-being because the hos'ital is not looking to gain a 'ro,it as (uch as it is to

Drake 3 serve the 'atients# Obviously this %ill be di,,erent ,or co('anies trying to (ake a 'ro,it* but it good to kno% %hen analy<ing non ,or 'ro,it organi<ations and other situations like a hos'ital#

Drake 1 ? :orks Cited Holloran* 3evin 3# @Methodist Hos'itals o, Dallas* Te as#@ DAC BOND# DAC =OAD* 0" Aug# 2012# :eb# 01 Oct# 2013# Methodist Health System - Dallas# Methodist Health 4yste(* n#d# :eb# 1 Oct# 2013#

Drake &

8igure 1# Net Patient Revenue

1200000 Revenue in Millions 1000000 800000 600000 400000 200000 0 2009 2010 Year 2011 2012

Drake 6

8igure 2# Operating Income Margin

10 9 8 7 6 5 4 3 2 1 0 2009 2010 Year 2011 2012

8igure 3# Total Long Term Debt

400000 350000 Debt in Millions 300000 250000 200000 150000 100000 50000 0 2009 2010 Year 2011 2012

Percent