7. Consider the following financial statement for BestCare HMO, a non-profit managed care plan:___________ BestCare HMO Income Statement Year Ended June 30, 2012 (in thousands)_______ REVENUE: Premiums earned $26,682 Coinsurance 1,689 Interest and other income 242 Total Revenue $28,613_____________ EXPENSES: Salaries and benefits $15,154 Medical Supplies and drugs 7,507 Insurance 3,963 Provision for bad debts 19 Depreciation 367 Interest 385 Total Expenses $27,395_______ NETINCOME $1,218____ NET ASSETS, beginning of year $900 NET ASSETS, end of year$2,118_______________________________________________ BestCare HMO Balance Sheet June 30, 2012 ( in thousands)__ ASSETS Cash and cash equivalents $2,737 Net premiums receivable 821 Supplies 387 Total Current Asset $3,945__ Net property and equipment $5,924 Total Assets $9,869___ LIABILITIES and NET ASSETSAccount payable-medical services $2,145 Accrued expenses 929 Notes payable 141____ Current portion of long-term debt 241__ Total current liabilities $3,456__ Long-term debt $4,295__ Total liabilities $7,751__ Net assets (equity) $2,118__ Total liabilities and net assets $9,869_____________________________________ Calculate and interpret the following ratios for Bestcare ( Industry Average____(1) Total margin 3.8%_____(2) Total Asset turnover 2.1____(3)Return on equity 25.5%____(4) Return on assets 8.0%_____(5) Current ratio 1.3_____(6) Days cash on hand 41days____(7) Average collection period 7days_____(8) Debt ratio 69%_____(9) Times interest earned ratio 2.8_______(10) Fixed asset turnover ratio 5.2