Description
The CEO of a 400-bed hospital has scheduled a board of directors meeting to discuss the current financial situation of the hospital and steps that need to be done to correct some current problems. The CFO needs to send each board member an explanation of the financial statements that they will be discussing. You are the Director of Finance and he has asked you to put together a memo, explaining each statement. Do the following:
- Provide a copy of the most common four statements used within your hospital and what information is available in each.
- Make sure you explain each main components/section of each statement.
NOTE: You can develop your own set of statements or research and pull healthcare financial statements online.
2-3 pages
Explanation & Answer
Hello,Attached find the completed work together with the plagiarism report. Go through it and in case you need any corrections kindly let me know.All the best.
Running Head: FINANCIAL STATEMENTS MEMO
Financial Statements Memo
Name
Institutional Affiliation
1
2
FINANCIAL STATEMENTS MEMO
Memo on Financial statements to be discussed by the board
This memo accompanies the overview of the balance sheet and the profit/ loss statements
of operation, statements of cash flows and stamen of changes in net assets to be deliberated by
the board for the first quarter of the 2018 financial year.
Medical Financial Statement
•
Balance sheet.
•
Statement of operation (profits and Losses).
•
Statement of cash flows.
•
Statement of changes in net assets.
1. Overview of the main balance sheet for the financial Period ending March 1 2018
Current Assets (CA) - The resources available to the Hospital during the year for patientcare services.
Cash
: $5,500,000
Net Accounts Receivable
: $2,000,000
Supplies
: $120,000
Total current assets
: $1,870,000
Gross Hospital Equipment and Property
: $8,500,000
Accumulated Depreciation
: $300,000
Net Hospital property and equipment
: $11,500,000
Total Assets
: $29,522,000
Current Liabilities (CL)-What the Hospital has to pay within a year
3
FINANCIAL STATEMENTS MEMO
Debt Payments:
$33000
Accounts payable:
$45000
Compensation & Benefits:
$66000
Settlements with third party payers:
$58000
Total Liabilities:
$202,000
Net Assets:
$29,322,000
2. Statement of Operation (Profit & Loss)
This follows the accrued accounting policies and revenue is recognized when it is earned for
example the patient service revenues for the period of the year in review. The expenses on the
other hand are recognized once assets are used up for the period of the year in review.
Unrestricted Revenue
Patient Revenue service:
$950, 000
Provision for bad debts:
$10,000
Net patient service revenue:
$940,000
Net asset...