consider the following financial statements for Green Valley Nursing Home, Inc, a for profit, long term care facility:

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Green Valley Nursing Home,Inc

statement of income and retained earnings

year ended December 31,2011

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revenue:

net patient service revenue-------------- $ 3,163,258

other revenue ---------------------------- 106,146

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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 ----------------------------- 85,000

interest ---------------------------------- 206,780

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total expenses ------------------------------ $3,180,356

operating income --------------------------- $3,180,356

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provision for income taxes ----------------- $89,048

---------------- 31,167

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net income ------------------------------- $57,881

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retained earnings, beginning of year ------ $199,961

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reatined earnings, end of year ------------- $257,842

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Green Valley Nursing Home Inc

Balance sheet

December 31,2011

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assets:

current assets :

cash ------------------------------------ $105,737

marketable securities ----------------- 200,000

net patrient accounts receivable ----- 215,600

supplies -------------------------------- 87,655

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total currentr assets ----------------------- $608,992

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property and equipment ----------------- $2,250,000

less accumulated depreciation ---------- 356,000

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net property and equipment ----------- $ 1,894,000

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total assets ------------------------------ $2,502,992

liablilites and shareholder's equity

current liablities:

accounts payable ---------------------- $72,250

accured expenses --------------------- 192,900

notes payable ------------------------- 100,000

current portion of long term debt ------ 80,000

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total current liabilities ---------------- $445,150

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long term debt

shareholder's equity :

common stock,$10 par value ---------- $100,000

retained earnings ----------------------- 257,842

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total shareholder's equity --------------- $2,502,992

a. perform a Du Pont analysis on Green Valley. assume that the industry average ratios are as follows:

total margin ------------- 3.5%

total asset turnover ----- 1.5

equity multiplier -------- 2.5

return on equity(ROE) ---- 13.1%

b. calculate and interpret the following ratios:

return on assets(ROA) --------------- 5.2%

current ratio -------------------------- 2.0

days cash on hand ------------------- 22 days

average collection period ------------ 19 days

debt ratio ----------------------------- 71%

debt to equity ratio ------------------ 2.5

times interest earned(TIE) ratio ---- 2.6

fixed asset turnover ratio ----------- 1.4

c. assume that there are 10,000 shares of Green Valley's stock outstanding and that some recently sold for $45 per share.

-- what is the firm's price/earnings ratio?

-- what is its market/book ratio?