FINC 5890-Dispatch & Patch Emergency Services Statement of Operations
Question B. At the very bottom II. Consider the following financial statements for nonprofit Dispatch & PatchEmergency Services:Dispatch & Patch Emergency Services Statement of Operations and Change in net AssetsYear Ended December 31, 2015Revenue:Insurance Proceeds$30,000Co-Payments4,500Interest and Other Income300Total Revenues$34,800Expenses:Salaries and Benefits$20,000Depreciation2,000Provision for Bad Debts1,500Supplies1,300Insurance1,000Interest200Total Expenses$26,000Net Income $ 8,800Net Assets, January 1, 2015 $ 400Net Assets, December 31, 2015 $ 9,200Assets:Dispatch & Patch Emergency Services Balance SheetDecember 31, 2015Cash$ 2,200Patient Accounts Receivable1,200Supplies100Total Current Assets$ 3,500Net Fixed Assets$18,400Total Assets$21,900Liabilities:Accounts Payable$ 2,300Accrued Expenses1,400Current Long-term debt1,000Total Current Liabilities$ 4,700Long-term Debt$ 8,000Total Liabilities$12,700Net Assets (Total Equity)$ 9,200Total liabilities and Net Assets $21,900Assume the industry average ratios are:Total margin 3.5%Total Asset Turnover 2.0Equity Multiplier 3.0Return on Equity (ROE) 21.0% Return on Assets (ROA) 7.0% Current Ratio 1.2Days Cash on Hand 40 days Average collection period 10 days Debt ratio 67%Debt-to-Equity ratio 2.0Times Interest Earned 3.2Fixed Asset Turnover 6.0A. (6 Points) Perform a Du Pont analysis on Dispatch & Patch. Comment on what the results imply.Du-pont analysis helps to measure the assets at their gross book value rather than at net book value in order to produce higher Return on equity (ROE).B.(Show your work) For Dispatch & Patch, calculate the following ratios and give a one or two sentence comment on what the value of each of their ratios means in light of the industry average:Return on Assets Value:Current Ratio Value:Days Cash on Hand Value:Average collection period Value:Debt-to-Equity ratio Value:Times Interest Earned Value:Fixed Asset Turnover Value:
