Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Can anyone solve problem 17.4 on BestCare HMO from Healthcare Finance 6th edition by Gapenski and Reiter. Hi , Thank you dia P UOL Valld
Can anyone solve problem 17.4 on BestCare HMO from Healthcare Finance 6th edition by Gapenski and Reiter.
Hi ,
Thank you
dia P UOL Valld for both 2014 and 2015. cider the following financial statements for BestCare HMO. 17.4 Consider not-for-profit managed care plan: BestCare HMO Statement of Operations and Change in Net Assets, Year Ended June 30, 2015 (in thousands) Revenue: Premiums earned $26,682 Coinsurance 1,689 Interest and other income 242 Total revenues $28,613 Expenses: Salaries and benefits $15,154 Medical supplies and drugs 7,507 Insurance 3,963 Provision for bad debts Depreciation 367 Interest 385 Total expenses $27,395 Net income $ 1,218 19 Net assets, beginning of year Net assets, end of year $ 900 $ 2,118 BestCare HMO Balance Sheet, June 30, 2015 in thousands) Assets: $2,737 821 Cash and cash equivalents Net premiums receivable Supplies Total current assets Net property and equipment Total assets $3,945 $5,924 $9,869 (continued) (continued from previous page) Liabilities and Net Assets: Accounts 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 a. Perform a Du Pont analysis on BestCare. Assume that the industry average ratios are as follows: Total margin 3.8% Total asset turnover 2.1 Equity multiplier 3.2 Return on equity (ROE) 25.5% b. Calculate and interpret the following ratios for BestCare: Return on assets (ROA) Current ratio Days cash on hand Average collection period Debt ratio Debt-to-equity ratio Times interest earned (TIE) ratio Fixed asset turnover ratio Industry Average 8.0% 1.3 41 days 7 days 69% 2.2 2.8 5.2 17.5 Consider the following financial statements for Green Valley Nursing Home, Inc., a for-profit, long-term care facilityStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started