a. How does this income statement differ from the ones presented in Exhibit 3.1 and Problem 3.2?
b. Why does Green Valley show a provision for income taxes while the other two income statements did not?
c. What is Green Valley’s total profit margin? How does this value compare with the values for Sunnyvale Clinic and BestCare?
d. The before-tax profit margin for Green Valley is operating income divided by total revenues. Calculate Green Valley’s before-tax profit margin. Why may this be a better measure of expense control when comparing an investor-owned business with a not-for-profit business
Homework Answers
As we know, there are two ways of preparing an income statement. One is a single step and the other multiple steps. Green Valley has presented the income statement in the Single Step Format. At the same time, the exhibit has used a multiple-step format. Unlike Multiple-step, the single-step does not classify the operating income/expense and Non-Operating income expenses. This leaves the users of the financial statement without a clear picture of the profitability.
The provision for taxes shows that the Green Valley Nursing home is an investor-owned (for profit), and it is a taxable entity. Whereas the others are a non-profit entity and the income is exempted from income tax
Green Valley Total Profit Margin = Net Income / Total Revenue
= ($57,881 / $3,269,404) * 100
= 1.77 %
Green Valley's Before Tax Profit Margin = Operating Income / Total Revenue
= ($89,048 / $3,269,404) * 100
= 2.72 %
The non-profit entity does not have a tax component and hence no income after taxes. So, the data for comparison must be that with the same components. i.e., profit before taxes of one entity must be compared with a profit before the other entity's taxes. Otherwise, we will not get a clear picture.
Apparently, this is a better measure of expense control when compared with an investor-owned business with a not-for-profit business
Add Answer to:
a. How does this income statement differ from the ones presented
in Exhibit 3.1 and Problem...
I would like to check my work for problem 3.3 on pg 105 in Healthcare Finance...
I would like to check my work
for problem 3.3 on pg 105 in Healthcare Finance 5th ed. Will
someone help?
a) This income statement is different in the fact that their
revenue (non-operating revenue) is combined with operating revenue
and in Exhibit 3.1 the non-operating revenue is categorized at the
bottom. This statement also has an addition of income taxes
suggesting that they are investor-owned. This statement is true to
the numbers given whereas the previous two statements are...
Problem 1 Consider the following Green Valley Nursing Home Income Statement Revenue: Net patient service revenues...
Problem 1 Consider the following Green Valley Nursing Home Income Statement Revenue: Net patient service revenues Other income $2,862,000 106,146 $2,968,146 Total Revenues Expenses Salaries and benefits Medical supplies and drugs $ Insurance and other Provision for bad debt Depreciation Interest $1,132,000 966,781 296,357 110,000 85,000 206,780 S2,796,918 Total Expenses Operating income Provision for income taxes 171,228 31,167 NET INCOME 140,061 3.3(b) Why does Green Valley show a provision for income taxes while BestCare HMO does not? 3.2(c) What is...
Problem 1 Conside the follbwing BestCare HMO Income Statement Revenue: Premiums earned Coninsurance Interest and other...
Problem 1 Conside the follbwing BestCare HMO Income Statement Revenue: Premiums earned Coninsurance Interest and other income S153,455 1,689 242 155,386 Total Revenues Expenses: Salaries and benefits Medical supplies and drugs Insurance Provision for bad debt Depreciation Interest $125,322 7,507 3,963 19 367 385 137,563 $ Total Expenses NET INCOME 17,823 3.2(d) What is BestCares total profit Margin? Net Income Total Revenue Profit Margin #DIV/0! 3.2(d) How can the profit margin be interpreted?
How does Tampa Clinic’s statement of cash flows compare with Sunnyvale’s statement? Exhibit 4.6. The 2018...
How does Tampa Clinic’s statement of cash flows compare with
Sunnyvale’s statement? Exhibit 4.6.
The 2018 Income Statement and Balance Sheet of Tampa Clinic, a not-for-profit organization, are presented below Tampa Clinic Income statement Year Ended December 31, 2018 Operating Revenues: Patient service revenue Less provision for bad debts Net patient service revenue Other revenue Net operating revenues $524,630 (27.630) $497,000 10,000 $507 000 Expenses: Salaries and benefits Supplies Insurance Depreciation Interest Total expenses Operating income $231,950 76,050 16,700 8,000...
The 2018 Income Statement and Balance Sheet of Tampa Clinic, a not-for-profit organization, are presented below....
The 2018 Income Statement and Balance Sheet of Tampa Clinic, a not-for-profit organization, are presented below. Tampa Clinic Income Statement Year Ended December 31, 2018 Operating Revenues: Patient service revenue $524,630 Less provision for bad debts (27,630) Net patient service revenue $497,000 Other revenue 10,000 Net operating revenues $507,000 Expenses: Salaries and benefits $231,950 Supplies 76,050 Insurance 16,700 Depreciation 8,000 Interest 41,000 Total expenses $373,700 Operating income $133,300...
NET INCOME BestCare Health Insurer vs. Green Valley Nursing Home Inc. 2 Consider BestCare Health Insurer's...
NET INCOME BestCare Health Insurer vs. Green Valley Nursing Home Inc. 2 Consider BestCare Health Insurer's Income Statement below BestCare Health Insurer Statement of Operations Year Ended June 30, 2016 (in Thousands) Revenues Healthcare Premiums Fees and Other Revenue Net Investment Income 26,682 1,689 242 Total revenues 28,613 Benefits and Expenses Healthcare Costs Operating Expenses: 15,154 Selling Expenses General/administrative Expenses Interest Expense 3,963 7,893 385 Total Benefits and Expenses 27,395 NET INCOME 1,218 a. What is BestCare's total profit margin?...
NET INCOME BestCare Health Insurer vs. Green Valley Nursing Home Inc 2 Consider BestCare Health Insurer's...
NET INCOME BestCare Health Insurer vs. Green Valley Nursing Home Inc 2 Consider BestCare Health Insurer's Income Statement below BestCare Health Insurer Statement of Operations Year Ended June 30, 2016 (in Thousands) Revenues Healthcare Premiums Fees and Other Revenue Net Investment Income 26,682 1,689 242 Total revenues 28,613 Benefits and Expenses 15.154 Healthcare Costs Operating Expenses Selling Expenses General/administrative Expenses Interest Expense 3,963 7,893 385 27,395 Total Benefits and Expenses 1,218 NET INCOME a. What is BestCare's total profit margin?...
How do I solve for b? data presented in esented in the core valid for both...
How do I solve for b?
data presented in esented in the core valid for both 2014 and 2015. the following financial statements for BestCare HMO, a 174 Consider the for profit managed care plan Care HMO Statement of Operations and Change in Not Aucts, Year Ended June 30, 2015 in thousands $26,682 1.689 242 $28,613 Revenue Premiums earned Coinsurance Interest and other income Total revenues Expenses Salaries and benefits Medical supplies and drugs Insurance Provision for bad debts Depreciation...
The 2018 Income Statement and Balance Sheet of Tampa Clinic, a not-for-profit organization, are presented below...
The 2018 Income Statement and Balance Sheet of Tampa Clinic, a not-for-profit organization, are presented below Tampa Clinic Income statement Year Ended December 31, 2018 Operating Revenues: Patient service revenue Less provision for bad debts Net patient service revenue Other revenue Net operating revenues $524,630 (27.630) $497,000 10,000 $507 000 Expenses: Salaries and benefits Supplies Insurance Depreciation Interest Total expenses Operating income $231,950 76,050 16,700 8,000 41,000 9373,700 $133,300 Nonoperating income Investment income Net income 700 Dncernber 31, 201s 2018...
1.What is Warren Clinic’s net operating revenue ? Calculate the net operating revenue, yourself. Entries for...
1.What is Warren Clinic’s net operating revenue ? Calculate the net operating revenue, yourself. Entries for the Warren Clinic Income Statement are listed below in alphabetical order. Reorder the data in the proper format. Depreciation Expense $90,000 General/Administration Expenses $70,000 Interest Expense $20,000 Investment Income $40,000 Net Operating Revenues $XXX Other Revenue $10,000 Patient Service Revenue $440,000 Provision for Bad Debts $40,000 Purchased Clinic Services $90,000 Salaries and Benefits $150,000 Total Expenses $420,000 Question #2 $420,000 What are Warren Clinic’s...
I would like to check my work
for problem 3.3 on pg 105 in Healthcare Finance 5th ed. Will
someone help?
a) This income statement is different in the fact that their
revenue (non-operating revenue) is combined with operating revenue
and in Exhibit 3.1 the non-operating revenue is categorized at the
bottom. This statement also has an addition of income taxes
suggesting that they are investor-owned. This statement is true to
the numbers given whereas the previous two statements are...
Problem 1 Consider the following Green Valley Nursing Home Income Statement Revenue: Net patient service revenues Other income $2,862,000 106,146 $2,968,146 Total Revenues Expenses Salaries and benefits Medical supplies and drugs $ Insurance and other Provision for bad debt Depreciation Interest $1,132,000 966,781 296,357 110,000 85,000 206,780 S2,796,918 Total Expenses Operating income Provision for income taxes 171,228 31,167 NET INCOME 140,061 3.3(b) Why does Green Valley show a provision for income taxes while BestCare HMO does not? 3.2(c) What is...
Problem 1 Conside the follbwing BestCare HMO Income Statement Revenue: Premiums earned Coninsurance Interest and other income S153,455 1,689 242 155,386 Total Revenues Expenses: Salaries and benefits Medical supplies and drugs Insurance Provision for bad debt Depreciation Interest $125,322 7,507 3,963 19 367 385 137,563 $ Total Expenses NET INCOME 17,823 3.2(d) What is BestCares total profit Margin? Net Income Total Revenue Profit Margin #DIV/0! 3.2(d) How can the profit margin be interpreted?
How does Tampa Clinic’s statement of cash flows compare with
Sunnyvale’s statement? Exhibit 4.6.
The 2018 Income Statement and Balance Sheet of Tampa Clinic, a not-for-profit organization, are presented below Tampa Clinic Income statement Year Ended December 31, 2018 Operating Revenues: Patient service revenue Less provision for bad debts Net patient service revenue Other revenue Net operating revenues $524,630 (27.630) $497,000 10,000 $507 000 Expenses: Salaries and benefits Supplies Insurance Depreciation Interest Total expenses Operating income $231,950 76,050 16,700 8,000...
NET INCOME BestCare Health Insurer vs. Green Valley Nursing Home Inc. 2 Consider BestCare Health Insurer's Income Statement below BestCare Health Insurer Statement of Operations Year Ended June 30, 2016 (in Thousands) Revenues Healthcare Premiums Fees and Other Revenue Net Investment Income 26,682 1,689 242 Total revenues 28,613 Benefits and Expenses Healthcare Costs Operating Expenses: 15,154 Selling Expenses General/administrative Expenses Interest Expense 3,963 7,893 385 Total Benefits and Expenses 27,395 NET INCOME 1,218 a. What is BestCare's total profit margin?...
NET INCOME BestCare Health Insurer vs. Green Valley Nursing Home Inc 2 Consider BestCare Health Insurer's Income Statement below BestCare Health Insurer Statement of Operations Year Ended June 30, 2016 (in Thousands) Revenues Healthcare Premiums Fees and Other Revenue Net Investment Income 26,682 1,689 242 Total revenues 28,613 Benefits and Expenses 15.154 Healthcare Costs Operating Expenses Selling Expenses General/administrative Expenses Interest Expense 3,963 7,893 385 27,395 Total Benefits and Expenses 1,218 NET INCOME a. What is BestCare's total profit margin?...
How do I solve for b?
data presented in esented in the core valid for both 2014 and 2015. the following financial statements for BestCare HMO, a 174 Consider the for profit managed care plan Care HMO Statement of Operations and Change in Not Aucts, Year Ended June 30, 2015 in thousands $26,682 1.689 242 $28,613 Revenue Premiums earned Coinsurance Interest and other income Total revenues Expenses Salaries and benefits Medical supplies and drugs Insurance Provision for bad debts Depreciation...
The 2018 Income Statement and Balance Sheet of Tampa Clinic, a not-for-profit organization, are presented below Tampa Clinic Income statement Year Ended December 31, 2018 Operating Revenues: Patient service revenue Less provision for bad debts Net patient service revenue Other revenue Net operating revenues $524,630 (27.630) $497,000 10,000 $507 000 Expenses: Salaries and benefits Supplies Insurance Depreciation Interest Total expenses Operating income $231,950 76,050 16,700 8,000 41,000 9373,700 $133,300 Nonoperating income Investment income Net income 700 Dncernber 31, 201s 2018...
Most questions answered within 3 hours.
-
Verify the MIRR is 9.29% given cash flows in years 1 and 2 of
$1,000 each,...
asked 36 minutes ago -
Calculate the pH of a 5.7 M solution of aniline (C6H5NH2; Kb =
3.8 x 10^-10)
asked 2 hours ago -
LSL R3, R3, R12
Memory
Address
Orig.
Data
Updated
Data
Register
Orig.
Data
Updated
Data
0x84F0...
asked 2 hours ago -
Air at 100 kPa and density of 1.2 kg/m3 flows upward through a
5-cm diameter inclined...
asked 2 hours ago -
Define the following concepts in your own words: (a) stiffness,
(b) strength, (c) strain,
(d) ductility,...
asked 3 hours ago -
In C++
In this homework, you will be tasked with creating functions to
manipulate strings that...
asked 4 hours ago -
An isolated colony represents a pure culture. one rare occasions
, however , a colony can...
asked 4 hours ago -
*****DO NOT ANSWER THIS QUESTION IF YOU DON'T
KNOW*******Rights and Duties of Auditors; Minimum 4000
words...
asked 5 hours ago -
The probability that Janie is wearing sunglasses is 1/4. The
probability that she is wearing sunglasses...
asked 5 hours ago -
Do you believe social media is more of a help or a hindrance in
controlling crises...
asked 6 hours ago -
Two long, parallel wires separated by 2.85 cm carry currents in
opposite directions. The current in...
asked 5 hours ago -
Question # 1. Develop a list of rehabilitation journals
that publish articles concerning career counseling for...
asked 5 hours ago