Green Valley Nursing Home Statement of Income & Retained Earnings
Revenue:
Net patient service revenue				$3,163,258
Other Revenue				$106,146
Total Revenue				$3,269,404
Expenses:
Salaries & Benefits				$1,515,438
Supplies & Drugs				$966,781
Insurance & other				$296,357
Bad Debts				$110,000
Depreciation				$85,000
Interest				$206,780
Total Expenses				$3,180,356
Operating Income				$89,048
Provision for income taxes				$31,167
Net Income				$57,881
Retained earnings, beginning of year				$199,961
Retained earnings, end of year				$257,842

Green Valley Nursing Home Balance Sheet December 31, 2012
Assets:
Cash				$105,737
Short-term securities				$200,000
Net patient accounts receivable				$215,600
Supplies				$87,655
Total current assets				$608,992
Property & equipment				$2,250,000
Less accumulated depreciation				$356,000
Net property $ equipment				$1,894,000
Total Assests				$2,502,992
Liabilities & Shareholder's Equity
Accounts Payable				$72,250
Accrued expenses				$192,900
Notes payable				$100,000
Current portion of long-term debt				$80,000
Total cuurent liabilities				$445,150
Long-term debt				$1,700,000
Sharholder's Equity:
Common stock, $10 par value				$100,000
Retained Earnings				$257,842
Total Shareholder's equity				$357,842
Total liabilities & shareholder's equity				$2,502,992

Calculate and interpret the following ratios:

Industry Averages:

Return on assets 5.2%

Current ratio 2.0

Days cash on hand 22 days

Avg collection period 19 days

Debt ratio 71%

Debt-to-equity 2.5

Times-interest-earned ratio 0.6

Fixed asset turnover ratio 1.4

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Ratio Analysis It is a quantitative method of gaining insight into the following into the companys liquidity Operational efficiency and pro... View the full answer