Consider this income statement: Green Valley Nursing Home Inc. Statement of Income, Year Ended December...
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Consider this income statement: Green Valley Nursing Home Inc. Statement of Income, Year Ended December 31, 2016 Revenue Resident services revenue Provision for bad debts Other revenue $3,163,258 (110,000) 106,146 Total revenues $3,159.404 Expenses Salaries and benefits Medical supplies and drugs Insurance and other Depreciation Interest $ 1,515,438 966,781 296,357 85,000 206,780 Total expenses $3,070,356 Operating income Income tax expense $ 89,048 31,167 Net income $ 57,881 a) How does this income statement differ from the ones presented in exhibits 11.1 and 11.2? b) Why does Green Valley show an income tax expense? c) What is Green Valley's total profit margin? d) The before-tax profit margin for Green Valley is operating income divided by total revenues. Calculate Green Valley's before-tax profit margin. Why might this be a better measure of expense control when comparing an investor-owned business with a not-for- profit business?.
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