Assess cost concepts, management control processes of budgeting, revenue cycle management, working capital, time value analysis, capital budgeting analysis, and long-term financing decisions.
Solve the following financial problems, and submit the answers, including your work, in a Word or Excel document:
Problem 3.5 from following;
Brandywine Homecare, a non-for-profit business, had revenues of $12 million in 2011. Expenses other than depreciation totaled 75 percent 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.
a) Construct Brandywines 2011 income statement
b) What were Brandywines net income, total profit margin, and cash flow?
c) Now, suppose the company changed its depreciation calculation procedures (still within GAAP) such that its depreciation expense doubled. How would this change affect Brandywines net income, total profit margin, and cash flow?
d) Suppose the change had halved, rather than doubled, the firms depreciation expense. Now, what would be the impact on net income, total profit margin, and cash flow?
Problem 4.5 from the following;
Consider the following balance sheet:
June 30, 2011
Net premiums receivable 821
Total current assets $3,945
Net property and equipment $5,924
Total assets $9,869
Liability and Net Assets
Account payable medical services $2, 145
Accrued expense 929
Notes payable 382
Total current liabilities $3,456
Long-term debt $4, 295
Total liabilities $7,751
Net assets—-unrestricted equity $2,118
Total liabilities and net assets $9,869
a) How does this balance sheet differ from the one percent in exhibit 4.1 for Sunnyvale?
b) What is BestCares net working capital for 2011?
c) What is BestCares debt ration? How does it compare with Sunnyvales debt ratio?
Problem 4.6 from the following;
Please check the balance sheet for Green Valley Nursing, Home, Inc. is in the attached file, and follow the question below;
a) How does this balance sheet differ from the ones presented in Exhibit 4.1 and problem 4.5?
b) What is Green Valleys net working capital for 2011?
c) What is Green Valleys debt ratio? How does it compare with the debt ratio for Sunnyvale and BestCare?
What is BestCares net working capital for 2011?