. The Green Valley Nursing Home is required to show the provision of income taxes in their income statement due to the company being a for profit organization. A for profit company (which earns taxes) is not exempt from paying income taxes so it has to be reported in the income statement. Moreover, the other companies (Best Care HMO and Sunnyvale Clinic) are considered not for profit. Meaning they do not earn profit but they earn their net income from donation and customer’s revenues. In the case of the two companies, they are exempt from paying income taxes, thus they are not required to include it in the income statement.

c. Total profit margin = Net income/total revenue
Total profit margin for Green Valley Nursing Home = $75,881/$3,269,404 = $0.0177 or 1.77%
This means that for every $1 in sale, the Green Valley Nursing Home makes $ 0.0177 in operating earnings.
Total profit margin for problem 3.2- Best Care HMO = 1,218/28,613 = $0.0425 or 4.25%
This means that for every $1 in sale, the Best Care HMO makes $ 0.0425 in operating earnings.
Total profit margin for Sunnyvale Clinic = 7,860/ 176,092 = $ 0.0446 or 4.46%
This means that for every $1 in sale, the Sunnyvale Clinic makes $ 0.0446 in operating earnings.
*Now looking at the total profit margin’s numbers for all three companies, we can conclude that Green Valley Nursing Home did not generate enough profit when compared to the other companies. This difference could be due to high cost or labor.

d. Green Valley Nursing Home’s before tax profit margin = operating income/total revenue
Green Valley before tax profit margin = $89,048/ $3,269,404 =