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Performing a Du Pont analysis the ROE comes out to 0%, is this correct? Hoping that I am not missing something! 17.5. Consider the following
Performing a Du Pont analysis the ROE comes out to 0%, is this correct? Hoping that I am not missing something!
17.5. 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, 2020 Revenue: Resident services 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 406,357 Depreciation 85,000 Interest 206,780 Total expenses $3,180,356 Operating income $89,048 Income tax expense 31,167 Net income $ 57,881 Retained earnings, beginning of year $ 199,961 Retained earnings, end of year $ 257,842Green Valley Nursing Home, Inc. Balance Sheet December 31, 2020 Assets Current Assets: Cash and cash equivalents $ 105,737 Marketable securities 200,000 Net accounts receivable 215,600 Supplies 87,655 Total current assets $ 603,992 Property,r and equipment $2,250,000 Less accumulated depreciation 356,000 Net propert}I and equipment $1,894,000 Total assets $2 ,502 ,992 Liabilities and Shareholders' Equity Current Liabilities: Aeeonnts payable $72,250 Aeerned expenses 192,900 Notes payable 100,000 Current portion oflongterni debt 30,000 Total current liabilities $ 445,150 Longterm debt $1,700,000 Total liabilities $2,145,150 Shareholders' Equity: Common stock, $10 par value $ 100,000 Retained earnings 257,842 Total shareholders' equity 3 357,342 Total liabilities and shareholders' equity $2,502,992Step by Step Solution
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