Green Valley Nursing Home, Inc., Statement of Income and Retained Earnings, Year Ended December 31, 2015 $3,163,258 Revenue: 106,146 Net patient service revenue Other revenue $3,269,404 Total revenues Expenses: Salaries and benefits Medical supplies and drugs Insurance Provision for bad debts Depreciation Interest Total expenses Operating income Provision for income taxes Net income $1,515,438 966,781 296,357 110,000 85,000 206,780 $3,180,356 $ 89,048 31,167 $ 57,881 Retained earnings, beginning of year Retained earnings, end of year $ 199,961 $ 257,842 Green Valley Nursing Home, Inc., Balance Sheet, December 31, 2015 Assets Current Assets: Cash Marketable securities Net patient accounts receivable Supplies Total current assets Property and equipment Less accumulated depreciation Net property and equipment $ 105,737 200,000 215,600 87,655 $ 608,992 $2,250,000 356,000 $1,894,000 $2,502,992 Total assets Llallies and S ervices Equity Current Liabilities: Accounts payable Accrued expenses Notes payable Current portion of long-term debt Total current liabilities Long-term debt Shareholders' Equity: Common stock, $10 par value Retained earnings Total shareholders' equity Total liabilities and shareholders' equity $ 72,250 192,900 100,000 80,000 $ 445,150 $1,700,000 $ 100,000 257,842 $ 357,842 $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) 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 5.2% 2.0 22 days 19 days 71% 2.5 2.6