Financial statements for BestCare HMO, a not-for-profit managed care plan. a) Calculate and interpret the following ratios for BestCare: (5 points each) Industry Average i. Return on assets 8.0% ii. Current ratio 1.3 iii. Days cash on hand 41 days iv. Debt ratio 69% v. Times interest earned ratio 2.8 vi. Fixed asset turnover ratio 5.2 b) Perform a DuPont analysis on BestCare and interpret using the following industry average ratios: (10 points) Total margin 3.8% Total asset turnover 2.1 Equity multiplier 3.2 Return on equity 25.5%

BestCare HMO Statements of Operations and Change in Net Assets Year Ended June 30, 2016 (in thousands) BestCare HMO Balance Sheet June 30, 2016 (in thousands) Revenues Premiums earned Coinsurance Interest and other income $26,682.00 $1,689.00 $242.00 $28,613.00 Assets Cash and cash equivalents Net permiums receivable Supplies $2,737 $821 $387 $3,945 Total revenues Total current assets Expenses: Net property and equipment $5,924 $15,154.00 Medical supplies and drugs$7,507.00 $3,963.00 $19.00 $367.00 $385.00 $27,395.00 Salaries and benefits Total assets $9,869 Insurance Provision for bad debts Depreciation Interest Liabilities and Net Assets Accounts payable - medical services Accrued expenses Notes payable Current portion of long-term debt $2,145 $929 $141 $241 $3,456 Total expenses Net income Total current liabilities $1,218.00 Net assets, beginning of year5900.00 $2,118.00 $4,295 $7,751 $2,118 $9,869 Long-term debt Net assets, end of year Total liabilities Net assets (equity) Total liabilities and net assets