17.4 consider the following financial statements for bestcare hmo, a

a. Perform a Du Pont analysis on BestCare. Assume that the industry

average ratios are as follows:

Don't use plagiarized sources. Get Your Custom Essay on
Need an answer from similar question? You have just landed to the most confidential, trustful essay writing service to order the paper from.
Just from $11/Page
Order Now

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 ratios for BestCare:

                                             Industry Average

Return on assets (ROA)          8.0%

Current ratio                              1.3

Days cash on hand                 41days

Average collection period        7days

Debt ratio                                       69%

Debt-to-equity ratio                      2.2

Times interest earned (TIE) ratio 2.8

Fixed asset turnover ratio            5.2