Consider the following financial statements for Green Valley Nursing Home, Inc., a for-profit, long-term care facility: Green Valley Nursing Home, Inc. Statement of Income and Retained Earnings Year Ended December 31, 2XXX Revenue: Net patient service revenue $3,163,258 Other revenue $106,146 Total revenues $3,269,404 Expenses: Salaries and benefits $1,515,438 Medical supplies and drugs $966,781 Insurance and other $296,357 Bad Debt $110,000 Depreciation $85,000 Interest $206,780 Total expenses $3,180,356 Operating income $89,048 Provision for income taxes $31,167 Net income $57,881 Retained earnings, beginning of year $199,961 Retained earnings, end of year $257,842 Green Valley Nursing Home, Inc. Balance Sheet Year Ended December 31, 2XXX Assets Current assets: Cash $105,737 Marketable securities $200,000 Net patient accounts receivable $215,600 Supplies $87,655 Total current assets $608,992 Property and equipment $2,250,000 Less accumulated depreciation $356,000 Net property and equipment $1,894,000 Total assets $2,502,992 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $72,250 Accrued expenses $192,900 Notes payable $100,000 Current portion of long-term debt $80,000 Total current liabilities $445,150 Long-term debt $1,700,000 Shareholders' equity: Common stock, $10 par value $100,000 Retained earnings $257,842 Total shareholders' equity $357,842 Total liabilities and shareholders' equity $2,502,992 a. Perform a Du Pont analysis on Green Valley. Assume that the industry average ratios are as follows: Industry average 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: Industry average 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

HOW TO FIND THE DAYS CASH ON HAND=? CORRECT ANSWERS IF NEEDED TO HELP FIND^

ROE=16.18

TOTAL MARGIN=1.77%

TOTAL ASSET TURNOVER= 1.31 EQUITY MULTIPLE=6.99

RETURN ON ASSETS=2.31%

CURRENT RATION=1.37 DAYS CASH ON HAND=????????????

AVERAGE COLLECTION PERIOD = 24.88 DEBT RATION=85.70%

DEBT TO EQUITY RATIO=5.99

TIE RATIO= 1.43

FIXED ASSETS TURNOVER=1.73