Problem $3$

Consider the following balance sheet accounts for Waterman HMO for December $2022.$

Cash and cash equivalent

$$2,737,000$

Net premiums receivable

$$821,000$

Other current assets

$$387,000$

Long$-$term investments

$$4,424,000$

Net property and equipment

$$1,500,000$

Healthcare costs payable

$$2,145,000$

Accrued expenses

$$929,000$

Unearned premiums

$382,000$

Long$-$term debt

$$4,295,000$

Equity

$$2,118,000$

a$.$ Provide a description of each account. Hint: Complete the following chart:

Account

Description

Cash and cash equivalent

Net premiums receivable

Other current assets

Long$-$term investments

Neet property and equipment

Healthcare costs payable

Accrued expenses

Unearned premiums

Long$-$term debt

Equity

b$.$ Create Waterman HMO$$s balance sheet.

c$.$ How does this balance sheet differ from the one presented in exhibit $4\mathrm{.}1$ for Sunnyvale?

d$.$ What is Waterman HMO$$s net working capital for $2022?$

e$.$ What is Waterman HMO$$s debt ratio?

f$.$ See part e$,$ how does it compare with Sunnyvale$$s debt ratio?