3.1. Entries for the Warren Clinics 2020 income statement are listed below in alphabetical order.

Depreciation expense $90,000 General/administrative expenses 70,000 Interest expense 20,000 Investment income 40,000 Net income 30,000 Net operating income (loss) (10,000) Net operating revenues 410,000 Net patient service revenue 400,000 Other revenue 10,000 Purchased services 90,000 Salaries and benefits 150,000 Total expenses 420,000

3.2. Consider the following income statement:

BestCare HMO Statement of Operations Year Ended June 30, 2020 (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: General and administrative expenses 7,874 Selling expenses 3,963 Interest expense 385 Total benefits and expenses $27,376 Net income $1,237

a. How does this income statement differ from the one presented in exhibit 3.1?

b. What is BestCares total profit margin? How can it be interpreted?