Consider the following financial statements for nonprofit Dispatch & Patch Emergency Services:

Dispatch & Patch Emergency Services Statement of Operations and Change in net Assets Year Ended December 31, 2015

Revenue:

Insurance Proceeds $30,000

Co-Payments 4,500

Interest and Other Income 300

Total Revenues= $34,800 Expenses:

Salaries and Benefits $20,000

Depreciation 2,000

Provision for Bad Debts 1,500

Supplies 1,300

Insurance 1,000

Interest 200

Total Expenses= $26,000

Net Income $ 8,800

Net Assets, January 1, 2015 $ 400

Net Assets, December 31, 2015 $ 9,200

Dispatch & Patch Emergency Services Balance Sheet December 31, 2015

Assets:

Cash $ 2,200

Patient Accounts Receivable 1,200

Supplies 100

Total Current Assets= $ 3,500

Net Fixed Assets $18,400

Total Assets $21,900 Liabilities:

Accounts Payable $ 2,300

Accrued Expenses 1,400

Current Long-term debt 1,000

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Total Current Liabilities $ 4,700

Long-term Debt $ 8,000

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Total Liabilities $12,700

Net Assets (Total Equity) $ 9,200

Total liabilities and Net Assets $21,900

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Assume the industry average ratios are: Total margin 3.5%

Total Asset Turnover 2.0

Equity Multiplier 3.0

Return on Equity (ROE) 21.0%

Return on Assets (ROA) 7.0%

Current Ratio 1.2

Days Cash on Hand 40 days

Average collection period 10 days

Debt ratio 67%

Debt-to-Equity ratio 2.0

Times Interest Earned 3.2

Fixed Asset Turnover 6.0

A. Perform a Du Pont analysis on Dispatch & Patch. Comment on what the results imply.