Were Brandywine's 2007 Net Income, Total Profit Margin, And Cash Flow?
Brandywine Homecare
Health Financial Management – HAS 525
October 20, 2011
Bandywine Homecare, a not-for-profit business, had revenues of $12 million in 2007. Expenses
other than depreciation totaled 75% percent of revenues, and depreciation expense was $1.5
million. All revenues were collected in cash during the year and all expenses other than
depreciation were paid in cash.
What were Brandywine’s 2007 net income, total profit margin, and cash flow?
Net income = 12M * (1 - 75%) - 1.5M = $1.5 million
Total profit margin = $1.5M/12M = 12.5%
Cash flow = 1.5M + 1.5M = $3 million
Suppose the company changed its depreciation calculation procedures(still within GAAP)such that
its depreciation expense
Health Financial Management – HAS 525
October 20, 2011
Bandywine Homecare, a not-for-profit business, had revenues of $12 million in 2007. Expenses
other than depreciation totaled 75% percent of revenues, and depreciation expense was $1.5
million. All revenues were collected in cash during the year and all expenses other than
depreciation were paid in cash.
What were Brandywine’s 2007 net income, total profit margin, and cash flow?
Net income = 12M * (1 - 75%) - 1.5M = $1.5 million
Total profit margin = $1.5M/12M = 12.5%
Cash flow = 1.5M + 1.5M = $3 million
Suppose the company changed its depreciation calculation procedures(still within GAAP)such that
its depreciation expense