Brandywine Homecare 1

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Brandywine Homecare 1

Brandywine’s 2007 Homecare
Michelle Ray
HSA 525
July 17, 2011
Strayer University Online

Brandywine Homecare 2

Construct Brandywine’s 2007 Income Statement An income statement is the amount of revenue earned and expenses incurring by a business over a period of time. The income statement is separated into two parts, the revenue or moneys coming into a business and the expenses or the money going out of the business.

Brandywine’s 2007 Income Statement
Revenue
$12,000,000
Operating Expenses: Salaries Expense $5,000,000 Supplies $120,000 Utilities $140,000 Insurance $750,000
Depreciation $1.7 million
Total $4.3 million
Net Income $7.7 million
Brandywine Homecare 3
What were Brandywine’s 2007 net income, total profit margin, and cash flow? Net income is a company total earning. Net income is calculated by taking revenues and adjusting for the cost of doing business, depreciation, interest, taxes and other expenses. This number is found on a company’s income statement and is an important measure of how profitable the company is over a period of time.
Revenue sinus Expense equal Net Income (Revenue – Expense = Net Income) $12,000,000 - $7.7 million = $4.3 million Total profit margin is usually called total margin and it is defined as net income divided by total revenue. The total margin is a measure of expense control for a given amount of revenues, the higher the net income, and hence total margin, the lower the expenses. Net Income divided by Total Revenue equal Total Profit Margin (Net Income /Total Revenue = Total Profit Margin. $7.7 million /12,000,000 = $4.3 million Cash flow is a revenue or expense stream that changes a cash amount over a given period. Cash inflow…...

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