HealthscopeRevenue of the firm is evaluated on the basis of the fair value of the compensation that hasbeen received or is going to be received in the future by the organization. Revenue can beassessed at the following points:Rendering the services: The time during which the service is rendered to a patient is the time,the firm records the transaction in the books of account (Melville, 2013).Rental income: The rental income which is received by the firm from the income of theoperating leases can be stated on a short line basis over the term of the relevant lease. Also,the initial direct costs of the negotiation and arrangement of the operating lease are added tothe amount of the leased asset and therefore proceed with the lease term on a straight-linebasis.Management fees: The revenue received by the management of the hospitals on the behalf ofthe organization is recognized in the terms of the relevant agreement. Operating lease Rental ExpenseThe operating lease rental expenses can be understood as an expense on the straight-line basisover the lease term. The other lease payment methods have been observed to have asystematic representation of the time pattern which helps to attain profit from theconsumption of the leased assets (Healthscope Annual report, 2017). The contingent rentals which are the part of the operating leases are treated as an expense inthe financial year in which it has taken place. In association with the operating lease, theorganization does not believe the risks and the benefits to be in accordance to the leasedassets (Merchant, 2012).3.Financial analysis20162017GrossProfitMargin[(GrossProfit/SalesRevenue)*100]77.391777.11111NetProfitMargin[(NetProfitaftertax/SalesRevenue)*100]8.167874.933333CurrentRatio(CurrentAssets/CurrentLiabilities)1.2853471.220844AcidTest[(CurrentAssets-Inventory)/CurrentLiabilities)]1.1388171.084367Debtequityratio-=debt/equity0.8731560.985223

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