for madam professor

HA520 Healthcare Financial Management

Assignment Unit 3

Problem 3.5 from pg 114 – Chapter 3

· Brandywine Homecare, a not-for-profit business, had revenues of $12 million in 2015. Expenses other than depreciation totaled 75% of revenues, and depreciation expense was $1.5 million. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash.

· Construct Brandywine’s 2015 income statement.

· What were Brandywine’s net income, total profit margin and cash flow?

· Now, suppose the company changed its depreciation calculation procedures (still within GAAP) such that its depreciation expense doubled. How would this change affect Brandywine’s net income, total profit margin and cash flow?

· Suppose the change had halved, rather than doubled, the firm’s depreciation expense. Now, what would be the impact on net income, total profit margin and cash flow?

Problem 4.5 from pg 152, Chapter 4

· Consider the following balance sheet:

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

·

· What is BestCare’s net working capital for 2015?

· What is BestCare’s debt ratio? How does it compare with Sunnyvale’s debt ration?

Problem 4.6 from pg 153, Chapter 4

· Consider the following balance sheet:

· How does this balance sheet differ from the ones presented in Exhibit 4.1 and Problem 4.5?

· What is Green Valley’s net working capital for 2015?

· What is Green Valley’s debt ratio? How does it compare with the debt rations for Sunnyvale and BestCare?