AHIP Health Plan Finance and Risk Management AHM-520 Question # 97 Topic 4 Discussion

AHIP Health Plan Finance and Risk Management AHM-520 Question # 97 Topic 4 Discussion

AHM-520 Exam Topic 4 Question 97 Discussion:
Question #: 97
Topic #: 4

The Fairway health plan is a for-profit health plan that issues stock. The following data was taken from Fairway's financial statements:

Current assets.....$5,000,000

Total assets.....6,000,000

Current liabilities.....2,500,000

Total liabilities.....3,600,000

Stockholders' equity.....2,400,000

Fairway's total revenues for the previous financial period were $7,200,000, and its net income for that period was $180,000.

From this data, Fairway can determine both its current ratio and its net working capital. Fairway would correctly determine that its


A.

Current ratio is 1.39


B.

Current ratio is 2.00


C.

Net working capital equals $1,000,000


D.

Net working capital equals $3,000,000


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