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How do you perform a Du Point analysis given average ratios. This question comes from 17.4 of the book. Healthcare finance how do I get

How do you perform a Du Point analysis given average ratios. This question comes from 17.4 of the book. Healthcare finance how do I get started

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17.4 Consider the following financial statements for BestCare HMPO, a 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 19 Depreciation 367 Interest 385 Total expenses $27.395 Net income $1.218 - Net assets, beginning of year Net assets, end of year $900 $2.118 $2,737 821 387 $3.945 $5,924 $9.869 BestCare HMO Balance Sheet, June 30, 2015 in thousands) Assets: Cash and cash equivalents Net premiums receivable Supplies Total current assets Net property and equipment Total assets Liabilities and Net Assets: Accounts payable - medical services Accrued expenses Notes payable Current portion of long-term debt Total current liabilities Long-term debt Total liabilities Net assets (equity) Total liabilities and net assets $2,145 929 141 241 $3.456 $4.295 $7.751 $2,118 $9.869 ratios are as a. Perform a Du Pont analysis on BestCare. Assume that the industry average ratios are follows: Total margin Total asset turnover Equity multiplier Return on equity (ROE) 3.8% 2.1 3.2 25.5% b. Calculate and interpret the following ratios for BestCare: Industry Average 8.0% 1.3 41 days 7 days Return on assets (ROA) Current ratio Days cash on hand Average collection period Debt ratio Debt-to-equity ratio Time interest earned (TIE) ratio Fixed asset turnover ratio 69% 2.2 2.8

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