Economics Homework Help

I’m working on a finance discussion question and need a sample draft to help me learn.

You are considering accepting a partnership in a primary care practice. You have been provided with a set of financial reports that include the balance sheet, the income and expense statement, and the cash flow analysis. Identify at least four financial ratios you will examine to help decide if you are going to join the practice. Provide a rationale for the ratios you have selected. Chose any four ratio below but ensure that they correlate. Also please use at least 3 scholary or academic journals.

Profitability Ratios

Profit margin, Return on assets, Return on investment

Net income/Total revenue Net income/Total assets Net income/Equity

Liquidity Ratios

Current ratio Quick ratio

Current assets/Current liabilities

Long term solvency ratios

Long-term (more than 1 year) financing of the practice, which indicates how it financed itself (use of debt or invested capital) and its ability to meet its loan obli- gations, that is, to pay interest and principal payments.

Debt/Equity Leverage

Total liabilities/Total equity

Asset Management or Activity Ratios

The level of effectiveness in the practice’s use of assets.

Asset turnover Fixed-asset turnover Inventory turnover