# 17.4 Consider the following financial statements for BestCare HMO, a not-for-profit managed care plan:

a. Perform a Du Pont analysis on BestCare. Assume that the industry

average ratios are as follows:

Total margin 3.8%

Total asset turnover 2.1

Equity multiplier 3.2

Return on equity (ROE) 25.5%

b. Calculate and interpret the following ratios for BestCare:

Industry Average

Return on assets (ROA) 8.0%

Current ratio 1.3

Days cash on hand 41days

Average collection period 7days

Debt ratio 69%

Debt-to-equity ratio 2.2

Times interest earned (TIE) ratio 2.8

Fixed asset turnover ratio 5.2

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1. Perform a Du Pont analysis on BestCare. Assume that the industry average ratios are as follows: Total margin- 3.8% Total asset turnover- 2.1 Equity multiplier- 3.2 Return on equity- …

17.4 Consider the following financial statements for BestCare HMO, a not-for-profit managed care plan:

BestCare HMO Statement of Operations and Change in Net Assets

Year Ended June 30, 2011

(in …17.4 Consider the following financial statements for BestCare HMO, a not-for-profit managed care plan:

BestCare HMO Statement of Operations and Change in Net Assets

Year Ended June 30, 2011

(in …