Calculate the Return on Assets for Green Valley Nursing Home Inc., a for profit,

Question

Calculate the Return on Assets for Green Valley Nursing Home Inc., a for profit, long-term care facility, for FY2012.

Green Valley Nursing Home Inc. Statement of Income and Retained Earnings Year Ended December 31, 2012 Revenue: Net patient service revenue Other revenue $3,163,258 106,146 $3,269,404 Total revenues Expenses Salaries and benefits Medical supplies and drugs Insurance and other Provision for bad debts Depreciation Interest $1,515,438 966,781 296,357 110,000 85,000 206,780 $3,180,356 $89,048 31,167 $ 57,881 Retained earnings, beginning of year $ 199.961 $ 257,842 Total expenses Operating income Provision for income taxes Net income Retained earnings, end of year

Explanation / Answer

Return on assets= Annual net income/ average total assets

                       = 57,881/2,502,992 =0.02312 or 2.312%

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