13.4 Consider the following financial statements for BestCare, a not-for-profit health insurer, BestCare Health Insurer Statement of Operations, Year Ended June 30, 2016 (in Thousands) Revenue Healthcare premiums $26,682 Fees and other revenue 1,689 Net investment income 242 Total revenues $28,613 Benefits and expenses Healthcare costs $ 15.154 Operating expenses Selling expenses 3.963 General and administrative 7,893 expenses Interest expense 385 Total expenses $27.995 $ 1.218 Net income BestCare Health Insurer Balance Sheet, June 30, 2016 (in Thousands) ASSETS Cash and cash equivalents Net premiums receivable Other current assets Total current assets Long-term investments Net property and equipment Total assets LIABILITIES AND EQUITY Healthcare costs payable Accrued expenses Unearned premiums $2.737 821 387 $1.945 $4.424 $1.500 $9.869 $2,145 929 382 Total current liabilities $3,456 Long-term debt $6.395 Total liabilities $7.751 Equity $2,118 Total liabilities and equity $9,869 Perform a DuPont analysis on BestCare. Assume that the sector average ratios are as follows: Total margin 3.8% Total asset tureover 2.1 Equity multiplier 32 Return on equity 25.5% b. Calculate and interpret the following ratios for BestCare. Return on assets Current ratio DCOH (assume depreciation expense is $367) Average collection period Debt ratio Debt-to-equity ratio Times interest earned ratio Fixed-asset turnover ratio Sector Average 8.0% 1.3 41 days 7 days 69% 2.2 2.8 18.5