Which of the four types of financial statements do you feel works best for a hea

Business & Finance
Tutor: None Selected Time limit: 1 Day

Which of the four types of financial statements do you feel works best for a health care organization? Defend your choice using detail and examples.

Oct 3rd, 2015

Thank you for the opportunity to help you with your question!

The basic four types of financial statements are:

1. Balance sheet.

2.  income statement

3.owner's equity

4. statement of cash flow

 

There is no strict "correct" answer. You can make decent arguments for all three. It really depends on what the goal is in analyzing a company (are you trying to buy it? invest equity? buy its bonds?) But by convention, I think generally it goes something like this:

1) Cash flow
2) P/L
3) Balance Sheet

Cash flow is probably the most important because it allows you to see how readily a company can meet its debt and interest payments. A company can have a strong P/L, but at the end of the day, if a lot of the revenue generated is from accounts receivable, the company can still fail to meet its debt obligation. "Cash is king".

P&L is important because it gives you an idea how profitable the company is overall. Via P/L you can look at its margins and other ratios to see how it does in terms of generating profit relative to other players in the industry.

Balance sheet is probably the third statement you'd want to look at. It's more of a "long-term" view, or track record of how the company is doing.


Please let me know if you need any clarification for the doubts. I'm always happy to answer your questions. Looking forward to help you again. thank you. :)
Sep 18th, 2015

Are you studying on the go? Check out our FREE app and post questions on the fly!
Download on the
App Store
...
Oct 3rd, 2015
...
Oct 3rd, 2015
Dec 4th, 2016
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer