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 industry average ratios are as follows:

b. Calculate and interpret the following ratios:

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Statement of Income and Retained Earnings Year Ended December 31, 2008 Revenue: Net patient service revenue $3,163,258 Other revenue 106,146 Total revenues $3,269,404 Expenses: Salaries and benefits $1,515,438 Medical supplies and drugs 966,781 Insurance and other 296,357 Provision for bad debts 110,000 Depreciation Interest 85,000 206,780 Total expenses Operating income $3,180,356 $ 89,048 Provision for income taxes Net income 31,167 $ 57,881 Retained earnings, beginning of year $ 199,961 Retained earnings, end of year $ 257,842