Consider the following balance sheet: BestCare HMO Balance Sheet June 30, 2011 (
ID: 2406248 • Letter: C
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
Consider the following financial statements for Green Valley Nursing Home, Inc. a for profit long-term care facility:
Green Valley Nursing Home Inc.
Balance Sheet
December 31, 2011
Assets
Current assets:
Cash $105,737
Marketable securities 200,000
Net patient accounts receivables 215,600
Supplies 87,655
Total 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 Shareholder?s Equity
Current liabilities:
Accounts payable $72,250
Accrued expenses 192,900
Notes payable 100,000
Current portion of long-term debt 80,000
Total current liabilities $445,150
Long term debt $1,700,000
Shareholders? Equity:
Common stock, $10 par value $100,000
Retained earnings 257,842
Total shareholder?s equity $357,842
Total liabilities and shareholders? equity $2,502,992
A. WHAT IS THE PRIMARY DIFFERENCE BETWEEN THESE 2 STATEMENTS
c. What was Green Valley's total debt ratio?************************************* Current liabilities LT liabilities Total liabilities (debt) Total assets Total debt ratioExplanation / Answer
A.
The Major Difference is that both financial statements are of different period and so it cant be compared with each other. The 2nd major difference that Green Valley Nursing Home is way bigger than Best Care HMO. We can clearly say this by looking at Equity/ net asset of the company. However, this statements cant be compared with each other.
B. Total Debt Ratio is calculated by dividing Total Liabilities by Total Assets. It Measures how much debt entity uses as compared to assets.
Current liabilities 445150 LT liabilities 1700000 Total liabilities (debt) 2145150 Total assets 2502992 Total debt ratio 0.857034Related Questions
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