Chapter 13: Assessing Financial Condition 415 Green Valley Nursing Home Inc. Balance Sheet, December 31, 2016 ASSETS Current assets Cash Short-term securities Net accounts receivable Supplies $105,737 200,000 215,600 87,655 $ 608,992 2,250,000 356,000 $1,894,000 $2,502,992 Total current assets Property and equipment Less: Accumulated depreciation Net property and equipment Total assets LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable Accrued expenses Notes payable $ 72,250 192,900 100,000 Current portion of long-term debt80,000 $ 445,150 $1,700,00o Total current liabilities Long-term debt Shareholders' equity $100,000 257,842 $ 357,842 Total liabilities and shareholders' equity $2,502,992 Common stock, $10 par value Retained earnings Total shareholders' equity m a DuPont analysis on Green Valley. Assume that the sector average ratios are as follows: Total margin Total asset turnover Equity multiplier Return on equity 35% 1.5 2.5 13.1%

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Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.