This question come from Textbook Healthcare Finance An Introduction to Accountin
ID: 2716099 • Letter: T
Question
This question come from Textbook Healthcare Finance An Introduction to Accounting and Financial Management 5th Edition
Green Valley Nursing Home
Balance Sheet
December 31, 2011
Assets
Current Assets:
Cash $105,737
Investment 200,000
Net patient accounts receivable 215,600
Supplies
Total Current Assets $608,992
Property & Equipment $2,250,000
Less Accumulated Depreciation 356,000
Net Property & Equipment $1,894,000
Total Assets $2,502,992
Liabilities & Shareholders’ Equity
Current Liabilities:
Accounts Payable $ 72,250
Accrued Expenses 192,900
Notes Payable 180,000
Total Current Liabilities $445,150
Long-term debt $1,700,000
Shareholder’s Equity:
Common Stock, $10 par value $100,000
Retained Earnings 257,842
Total Shareholders’ Equity $357,842
Total Liabilities & Shareholders’ Equity $2,502,992
Answer the Following Questions
How does this balance sheet differ from the one presented in Exhibit 4.1. and Problem 4.5
What is Green Valley’s Debit Ratio? How does it compare with the debit ratios for Sunnyvale and BestCare?
What is Green Valley net Working capital for 2011?
Explanation / Answer
Debt ratio:
= Total liabilities÷Total assets
= $2,145,150÷$2,502,992
= 0.86
Net working capital:
= Current assets-Current liabilities
= $608,992-$445,150
= $163,842
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