FINANCIAL MANAGEMENT COURSE- MMHA6160week-2 assignment -finance
3.5 Brandywine Homecare Homecare, a not-for-profit business, had revenues of $12 million in 2011. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was $1.5 million. All revenues were collected in cash during the year and all expenses other than depreciation were paid in cash. a. Construct Brandywine’s 2011 income statement. b. What were Brandywine’s net income, total profit margin, and cash flow? c. Now, suppose the company changed its depreciation calculation procedures (still within GAP) such that its depreciation expense doubled. How would this change affect Brandywine’s netincome, total profit margin, and cash flow?
d. Suppose the change had halved, rather than doubled, the firm’s depreciation expense. Now, what would be the impact on net income, total profit margin, and cash flow?
4.5 Consider the following balance sheet:_____________________________________________________________________________________ Best Care HMO Balance Sheet June 30, 2011 (in thousands)_____________________________________________________________________________________AssetsCurrent Assets:Cash $2,737Net premiums receivable 821Supplies 387 Total current assets $3,945Net property and equipment $5,924Total assets $9,869
Liabilities and Net AssetsAccounts payable-medical services $2,145Accured expenses 929Notes payable 382 Total current liabilities $3,456Long-term debt $4,295 Total liabilities $7,751Net assets-unrestricted(equity) $2,118
Total liabilities and net assets $9,869
a. What is BestCare’s net working capital for 2011?b. What is BestCare’s debt ratio?
4.6 Consider this balance sheet_____________________________________________________________________________________Green Valley Nursing Home, Inc.Balance SheetDecember 31, 2011_____________________________________________________________________________________AssetsCurrent Assets: Cash $ 105,737 Investments 200,000 Net patient accounts receivable 215,600 Supplies 87,655Total current assets $ 608,992 Property and equipment $2,250,000 Less accumulated depreciation 356,000 Net property and equipment $1,894,000 Total assets $2,502,992
Liabilities and Shareholders’ EquityCurrent Liabilities: Accounts payable $ 72,250 Accrued expenses 192,900Notes payable 180,000 Total current liabilities $ 445,150 Long-term debt $ 1,700,000Shareholder’s Equity:Common stock, $10 par value $ 100,000Retained earnings 257,842 Total shareholders’ equity $ 357,842
Total liabilities and shareholders’ equity $ 2,502,992
a. How does this balance sheet differ from the one’s presented in Problem 4.5?b. What is Green Valley’s net working capital for 2011?c. What is Green Valley’s debt ratio? How does it compare with the debt ratios for Sunnyvale and BestCare?