Calculate and interpret the following rations for bestcare

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

Return on assets (ROA) 8.0%
Current ratio 1.3
Days cash on hand 41 days
Average collection period 7 days
Debt ratio 69%
Debt -to-equity ratio 2.2
Time interest earned (TIE) ratio 2.8
Fixed asset turnover ratio 5.2

 

Reference no: EM13256945

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