Reference no: EM131354438

Consider the following financial statements for nonprofit Dispatch & Patch Emergency Services: Dispatch & Patch Emergency Services Statement of Operations and Change in net Assets Year Ended December 31, 2015 Revenue: Insurance Proceeds $30,000 Co-Payments 4,500 Interest and Other Income 300 Total Revenues $34,800 Expenses: Salaries and Benefits $20,000 Depreciation 2,000 Provision for Bad Debts 1,500 Supplies 1,300 Insurance 1,000 Interest 200 Total Expenses $26,000 Net Income $ 8,800 Net Assets, January 1, 2015 $ 400 Net Assets, December 31, 2015 $ 9,200 Dispatch & Patch Emergency Services Balance Sheet December 31, 2015 Assets: Cash $ 2,200 Patient Accounts Receivable 1,200 Supplies 100 Total Current Assets $ 3,500 Net Fixed Assets $18,400 Total Assets $21,900 Liabilities: Accounts Payable $ 2,300 Accrued Expenses 1,400 Current Long-term debt 1,000 Total Current Liabilities $ 4,700 Long-term Debt $ 8,000 Total Liabilities $12,700 Net Assets (Total Equity) $ 9,200 Total liabilities and Net Assets $21,900 Assume the industry average ratios are: Total margin 3.5% Total Asset Turnover 2.0 Equity Multiplier 3.0 Return on Equity (ROE) 21.0% Return on Assets (ROA) 7.0% Current Ratio 1.2 Days Cash on Hand 40 days Average collection period 10 days Debt ratio 67% Debt-to-Equity ratio 2.0 Times Interest Earned 3.2 Fixed Asset Turnover 6.0 A. (6 Points) Perform a Du Pont analysis on Dispatch & Patch. Comment on what the results imply. B. (21 Points) 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: 1. Return on Assets Value: 2. Current Ratio Value: 3. Days Cash on Hand Value: 4. Average collection period Value: