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Discuss the financial trends you believe the board should note in their planning.

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  • Post Date 2018-11-05T11:46:42+00:00
  • Post Category Essays

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Discuss the financial trends you believe the board should note in their planning.

Mechanisms for Evaluating Financial Health of Health Care Organizations

INSTRUCTIONS:

MECHANISMS FOR EVALUATING FINANCIAL HEALTH OF HEALTH CARE ORGANIZATIONS
The board of directors of Pearland Medical Center is working on a strategic financial plan for its Urology Surgery Hospital facility. One of the strategic goals is to build a new $1 million prostate cancer research wing in five years. The board is concerned that current economic conditions might reduce revenues over the next five years and they are uncertain about the fate of the planned construction project. You are a part of the team tasked with conducting a capital budgeting analysis. 
Urology Surgery Hospital reported $1.5 million in revenue in 2012 and $1.3 million in 2013. The hospital’s equity was $2 million in 2013; the equity was $2.41 million in 2012. The hospital received delayed third-party payments in 2013 of $500,000.
The hospital received $250,000 in grants in 2013. 
The hospital`s current liabilities included operating costs of $1 million in 2012 and $1.2 million in 2013. In addition, the hospital retired $150,000 of debt in 2012 and 2013 (though it still held $750,000 in debt in 2013, compared to long-term debt of $900,000 in 2012). The hospital funded the employee pension plan with matching funds of $150,000 in both 2012 and 2013. Malpractice costs were $150,000 in 2012 and 2013. Depreciation expenses were $100,000 in 2012 and $105,000 in 2013. The hospital is a nonprofit facility so it incurs no tax liabilities. 
Income Worksheet
Income Worksheet
ASSETS LIABILITIES NET WORTH
2012 2013 2012 2013 2012 2013
Operating expenses 1,000,000 1,200,000 
Debt retirement 150,000 150,000 
Retirement plan 150,000 150,000 
Malpractice costs 150,000 150,000 
Depreciation 100,000 105,000 
Long-term debt 900,000 2,410,000 2,000,000
Revenue 1, 500,000 1,300,000 
Equipment & fixtures 1,000,000 1,000,000 
Delayed payments 0.00 500,000 
Grants 0.00 250,000 
Cash in bank 2,360,000 1,455,000 
Using the format below, on page 1 of your paper, create a balance sheet as of December 31, 2012, and a balance sheet as of December 31, 2013. Compose them in a table, next to each other, so it will be convenient to compare. You can copy/paste the table below into a Word document.
Calculate the Current Ratio, Working Capital, and Leverage (or Debt/Worth Ratio) for 2012 and 2013 (include those in your paper). 
Discuss the financial trends you believe the board should note in their planning.

CONTENT:

Healthcare Finance: Mechanisms for Evaluating Financial Health of Health Care Organizations Name Course Instructor Date Balance Sheet for 2012 and 2013 Period Ending20122013AssetsCurrent assets Cash in Bank2,360,0001,455,000Revenue1,500,0001,300,000Delayed Payments0500,000Grants0250,000Total Current AssetsFixed Assets Equipment and Fixtures1,000,0001,000,000 (less Depreciation)($100,000)($105,000)Total Fixed Assets900,000895,000Total assets4,760,0004,400,000LiabilitiesCurrent Liabilities Operating costs1,000,0001,200,000Retirement plan150,000150,000Debt Retirement150,000150,000Malpractice Costs150,000150,000Total Current LiabilitiesLong-Term Liabilities Long-Term Debt900,000750,000Total LiabilitiesNet worth (Total equity)2,410,0002,000,000Total Liabilities and net assets4,760,0004,400,000 Background The balance sheet includes the assets and liabilities to s

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