Berger Chp 1 & 2 Questions:

Berger Chp 1 & 2 Questions:
Please answer the following questions about Chapters 1 & 2 in the Berger text. I recommend you insert your answers directly into this document after each question. Your answers should only be a few phrases/sentences.
In Table 1.5 on page 28ff: (MRI project)
1. How does revenue compare to budget? Seems like net revenue didn’t do as well as gross revenue – why?
2. How did they do on variable expenses compared to budget? How did they do if you consider that actual volumes were different than budget?
3. In 2007, net revenue was 8.7% above budget but net operating profit was 78.6% above budget – how?
4. How could gross revenues have done better than volumes did?
5. How could gross revenue per test have been better than budget?
In Table 2.2 on page 53ff: (Balance Sheet)
6. What were some of the biggest changes in some of Ridgeland’s assets between 2007 and 2006.
7. What does “net assets” mean? Why isn’t there a “stockholders equity” section on this balance sheet?
In Table 2.3, on page 57ff: (Income Statement)
8. Revenue was up $2 mil but Net Patient Revenue was up only $600k, how come?
9. What is going on with salaries and contract labor? What is contract labor?
10. How did they do on expenses – are they going up faster or slower than revenue?
11. How did they do on investment income?
In Table 2.6 on page 67ff: (Cash Flow Statement)
12. Do capital expenditures use cash or generate cash?
13. Did they issue any long-term debt (ie. borrow money) this year?
14. Did their cash position getter better or worse this year?
On pages 72-74, Berger discusses sensitive accounts:
15. I was surprised that malpractice expenses weren’t in his list. Estimating the reserve for malpractice requires a lot of judgment. What do you think?