Question: Figure A.Statement of Operations, Year End

Revenue

Healthcare Premiums $26,682

Fees and other Revenue $1,689

Net Investment Income$242

Total Revenue $ 28, 613

Benefits and expenses

Healthcare costs $15,154

Operating Expenses

Selling expenses $3,963

General Administrative Expenses $7,893

Interest Expense$385

Total Expenses $27,395

Net Income $1,218

Figure B.Ratios

Return on assets 8.0%

Current Ratio 1.3

DCOH41 DAYS

(ASSUME DEPRECIATION EXPENSE IS $367)

Average Collection Period 7 DAYS

Debt ratio69%

Debt to equity ratio2.2

Times interest earned ratio2.8

Fixed asset turnover ratio18.5

You are given financial statements for Best Care, which is a healthcare insurer.

After performing the DuPont analysis, explain the analysis in your memo of your recommendation.

Calculate the ratios for figure B and explain how they are formed