Consider the following financial statements for BestCare HMO, a not-for-profit managed care plan: BestCare HMO Statement of Operations and Change in Net Assets Year Ended June 30, 2012 (in thousands) Revenue: Premiums earned $26,682 Coinsurance $1,689 Interest and other income $242 Total revenue $28,613 Expenses: Salaries and benefits $15,154 Medical supplies and drugs $7,507 Insurance $3,963 Provision for bad debts $19 Depreciation $367 Interest $385 Total expenses $27,395 Net income $1,218 Did BestCare spend $367,000 on new fixed assets during fiscal year 2011? If not, what is the economic rationale behind its reported depreciation expense? Explain the provision for bad debts entry. What is BestCare's total profit margin? How can it be interpreted?
Consider the following financial statements for BestCare HMO, a not-for-profit managed care plan: BestCare HMO Statement of Operations and Change in Net Assets Year Ended June 30, 2012 (in thousands) Revenue: Premiums earned $26,682 Coinsurance $1,689 Interest and other income $242 Total revenue $28,613 Expenses: Salaries and benefits $15,154 Medical supplies and drugs $7,507 Insurance $3,963 Provision for bad debts $19 Depreciation $367 Interest $385 Total expenses $27,395 Net income $1,218 Did BestCare spend $367,000 on new fixed assets during fiscal year 2011? If not, what is the economic rationale behind its reported depreciation expense? Explain the provision for bad debts entry. What is BestCare's total profit margin? How can it be interpreted?
