Park Ridge Homecare's financial statements are presented in Exhibits. we calculate selected ratios for 2008.

a. Calculate the business's financial ratios for 2007. Assume that Park Ridge had $18,000 in lease payments in 2007. (Use the ratio analysis discussion to identify the applicable ratios.)

b. Interpret the ratios. For the analysis, assume that the industry average data presented in the ratio analysis section is valid for 2007.

   

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Cash Flows from Operating Activities: Cash received from patient services Cash paid to employees and suppliers Interest paid Interest earned Net cash from operations Cash Flows from Investing Activities: Purchase of property and equipment Net cash from investing activities Cash Flows from Financing Activities: Securities purchases Contributions Repayment of long-term debt Net cash from financing activities Net increase (decrease) in cash and equivalents Cash and equivalents, beginning of year Cash and equivalents, end of year 2008 $3,783 (3,684) (16) $ 96 ($ 25) ($ 25) 13. ($ 35) 10 (13) 38) 33 ($ $ $ 41 $ 74 2007 $2,590 (2,541) $ ($ 19) ($ 19) ($ 15) 6 ($ 55 $ (14) 6 41 $ LA 0 9) 13. 28 $ 41 Cash Flows from Operating Activities: Cash received from patient services Cash paid to employees and suppliers Interest paid Interest earned Net cash from operations Cash Flows from Investing Activities: Purchase of property and equipment Net cash from investing activities Cash Flows from Financing Activities: Securities purchases Contributions Repayment of long-term debt Net cash from financing activities Net increase (decrease) in cash and equivalents Cash and equivalents, beginning of year Cash and equivalents, end of year 2008 $3,783 (3,684) (16) $ 96 ($ 25) ($ 25) 13. ($ 35) 10 (13) 38) 33 ($ $ $ 41 $ 74 2007 $2,590 (2,541) $ ($ 19) ($ 19) ($ 15) 6 ($ 55 $ (14) 6 41 $ LA 0 9) 13. 28 $ 41

Answer rating: 100% (QA)

Ratios are important components to assess the financial position of a business As indicated we are assuming that the data for the year 2007 is an indu... View the full answer