Consider the following financial statements for Green Valley Nursing Home, Inc., a for-profit, long-term care facility:

a. Perform a Du Pont analysis on Green Valley. Assume that the peer group average ratios are as follows:

b. Calculate and interpret the following ratios:

c. Assume that there are 10,000 shares of Green Valley’s stock outstanding and that some recently sold for $45 per share.
• What is the firm’s price/earnings ratio?
• What is its market/book ratio?

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Green Valley Nursing Home, Inc. Statement of Income and Retained Earnings Revenue: Year Ended December 31, 2020 Resident services revenue Other revenue Total revenues Expenses: Salaries and benefits Medical supplies and drugs Insurance and other Depreciation Interest Total expenses Operating income Income tax expense Net income Retained earnings, beginning of year Retained earnings, end of year $3,163,258 106,146 $3,269,404 $1,515,438 966,781 406,357 85,000 206,780 $3,180,356 $89,048 31,167 $ 57,881 $ 199,961 $ 257,842