Consider the following balance sheet: BestCare HMO Balance Sheet June 30, 2011 (

Question

Consider the following balance sheet:

BestCare HMO

Balance Sheet

June 30, 2011

(in thousands)

Assets

Current Assets:

Cash                                        $2,737

Net premiums receivable        821

Supplies                                  387

Total current assets    $3,945

Net property and equipment             $5,924

Total assets                                         $9,869

Liabilities and Net Assets

Accounts payable—medical

Services                                   $2,145

Accrued expenses                               929

Notes payable                                     382

            Total current liabilities            $3,456

Long-term debt                                   $4,295

Total liabilities                        $7,751

Net assets—unrestricted

(equity)                                   $2,118

Total liabilities and net

Assets                                     $9,869

a.         How does this balance sheet differ from the one presented in Exhibit 4.1 for Sunnyvale?

b.         What is BestCare’s net working capital for 2011?

c.         What is BestCare’s debt ratio? How does it compare with Sunnyvale’s debt ratio?

Explanation / Answer

Net working capital -Current asset -current liabilities

                           = 3945 - 3456

                           = $ 489

c)Debt ratio = Total debt /total asset

                 = 4295 / 9869

                 = .44

**Dont have a balance sheet of sunnyvale to compare with..please upload that too so that i can answer.

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