Gapenski Healthcare Finance Unit 3 , 3.5 Problem Solving

#3.5 Brandywine Homecare Brandywine Homecare, a not-for- arrive at business, had revenues of $12 million in 2007. Expenses other(a) than disparagement numerateed 75 percent of revenues, and disparagement put down was $1.5 million. completely revenues were collected in bills during the year and all outgos other than depreciation were paid in currency. A. Construct Brandywines 2007 income statement. Brandywine Homecare Income statement calendar month closedown December 31, 2007 Revenue $12,000,000 constitutionality revenue $12,000,000 Expenses: disparagement $ 1,500,000 another(prenominal) 12,000,000 x 75/ vitamin C = 9,000,000 Total expenses= wear and point + Other expenses= 1,500,000+ 9,000,000= $10,500,000 Total revenue essence expenses = Net income or Profit - 12,000,000- 10,500,000= 1,500,000 B. What were Brandywines 2007 can income, replete(p) profit margin, and mixture flow? The net income = $1,500,000. primitive profit marg in= total margin and is equal with net income divided by total revenues. $1,500,000/$12,000,000 = 0.125 or 12.5% Each dollar of revenue produces 12.5% of net income or profit. Cash flow= silver generated during the year The rough adhesion of cash flow = net income + non -cash expenses, in this case, $1,500,000 + $1,500,000 = 3,000,000 C.

Now, suppose the political party substituted 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? Brandywine Homecare Income statement with double depreciation expense: calendar month ending Dece mber 31, 2007 Revenue $12,000,000 Total re! venue $12,000,000 Expenses: derogation $ 1,500,000x2= 3,000,000 Other 12,000,000 x 75/100 = 9,000,000 Total expenses= dispraise + Other expenses= 1,500,000x2+ 9,000,000= $12,000,000 Total revenue total expenses = Net income or Profit - 12,000,000- 12,000,000= 0 What were Brandywines 2007 net income, total profit margin, and cash flow? The net income = $0 Total...If you want to get a full essay, order it on our website: OrderEssay.net

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