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What is greenvalley total margin

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Reference no: EM132823531

Consider this income statement:

Green Valley Nursing Home Inc. Statement of Income

Year Ended December 31, 2012

Revenue:

Resident services revenue $3,163,258

Other revenue 106,146

Total revenues $3,269,404

Expenses:

Salaries and benefits $1,515,438

Medical supplies and drugs 966,781

Insurance and other 296,357

Provision for bad debts 110,000

Depreciation 85,000

Interest 206,780

Total expenses $3,180,356

Operating income $ 89,048

Provision for income taxes 31,167

Net income $ 57,881

Problem 1: Why does Green Valley show a provision for income taxes while the other two income statements do not?

Problem 2: What is GreenValley's total (profit) margin? How does this value compare with the values for Park Ridge Homecare Clinic and BestCare HMO?

Problem 3: The before-tax profit margin for GreenValley is operating income divided by total revenues. Calculate GreenValley'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?

Reference no: EM132823531

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