Health Care Services Paper and Financial Statements

Week 6 Assignment 2 Submission you are using the Blackboard Mobile Learn iOS App, pase click "View in Browser"

Click the link above to submit your assignment.
Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center.
Instructors, training on how to grade is within the Instructor Center.

Assignment 2: Using Financial Ratios to Assess Organizational Performance
Due Week 6 and worth 240 points

Using the financial statements from your selected health care organization in Assignment 1, develop a financial plan for the next three (3) years.

Write a four to five (4-5) page paper in which you:

1.    Suggest the financial ratio that most financial analysts would use to evaluate the financial condition of the company. Provide support for your rationale.

2.    Speculate on the organization's ability to meet its financial obligations as they come due. Provide support for your rationale.

3.    Based on your ratio analysis, determine whether the profitability trends are favorable or unfavorable and explain your rationale.

4.    Using financial ratio analysis, predict whether or not the company will be viable in five (5) years based on its performance over the past three (3) years. Provide support for your prediction.

5.    Use at least two (2) quality academic resources. Note: Wikipedia and other Websites do not qualify as academic resources.

Your assignment must follow these formatting requirements:

·         Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.

·         Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

·         Evaluate the financial statements and the financial position of health care institutions.

·         Describe the overall planning process and the key components of the financial plan.

·         Use technology and information resources to research issues in health financial management.

·         Write clearly and concisely about health financial management using proper writing mechanics.

Click here to view the grading rubric for this assignment.

UHS paper prepared two weeks ago for me: 

Universal Health Service, Inc., a public traded company, has common stock that is traded on New York Stock Exchange, which is usually under the symbol NYSE: UHS. The Universal Health Service Company acts as an advisor to the Universal Health Realty Income Trust, which is a trust in real estate investment that was founded by Miller B. Allan in the year 1985. The Universal Health Company has built a record that is impressive based on continuous performance and achievement since the time it was founded in the year 1979. The company was founded by the chief executive officer and its chairman Alan B. Miller. The company is now a fortune of five hundred corporations having approximately $7.5 billion in its annual revenue that managed to produce a net income of above $452 million in the year 2013 (Hunnicutt, 2014). The UHS subsidiaries usually own as well as operate two hundred and twenty five facilities, which includes twenty five acute care hospitals, one hundred and ninety five behavioral health facilities, as well as three surgery centers in thirty seven different states, the U.S Virgin Island, Puerto Rico, and District of Columbia, and has employees more than sixty eight thousand people. Based on its financial statements, the company has remained successful since it was formed.

 Based on the financial statement for the years 2013, 2012, and 2011, as the newly appointed CFO, I may conclude that the company is financially growing after a review of the financial statements for the past three years. Based on the company’s financial statements, the net revenue for the company has been constantly increasing for the past three years. For example, the net revenue for the year 2011 was $6,760,222,000. For the year 2012, the net revenue was $6,961,400,000. For the year 2013, the net revenue was $7,283,822,000 (Hunnicutt, 2014). Based on this information, I concluded that the company is improving on its financial income. The company has the ability to finance its activities and this ability is constantly increasing with the increase in the company’s income. Further, the earnings per share is constantly increasing. The earning per share based on the year 2011, 2012, and 2013 were $3.97, $4.15, and $4.55 respectively (Hunnicutt, 2014). Based on the increasing earnings per share, the shareholders and investors are likely to react positively from the company’s operations because their income per share is constantly increasing. Further, the employees may benefit from the increased company’s income that may translate into increased benefits such as increased allowances due to hard work that improves the company’s success rates.

The trend that has the most significant impact on the organization is the economic fluctuations. The economic fluctuations greatly impact the prices of different medical products and services. The fluctuation in prices due to changes in the economy makes it difficult for the financial management to forecast on the income or expenses (Thondup, 2014). This further affect the planning of activities for the organization since the fluctuation may lead to underestimation or over estimation of expenses and income. The over estimation and under estimations may cost the company in terms of performance due to poor forecasts. For example, the company has to keep up with the improving technological state. In order to remain competitive within the health care industry, the company has to keep up with the current trends in technology. Based on the upgrade in technology, the company may be forced to charge higher prices for its services and products. However, the economy may restrict the company to make the adjustment in prices (Thondup, 2014). The company is usually forced to make adjustments on prices based on the economy. The effects of the economy may have great impact on the income making abilities of the company. However, the company may use different strategies in minimizing these impacts. For example, the company may opt to hold stock when prices are low through minimizing sales. Further, they may also increase stocks based on the low prices of products. Once the prices improve, they may then increase the sales of its products in order for them to cover up for the losses incurred when prices were low. Such a strategy may also have its disadvantages but it is the duty of the financial management to select the best strategy that the company may greatly benefit from.

As the CFO, I may suggest the improvement of time management and employees’ competence as the main strategy to improve the financial position of the company. Time management is the key factor to improving a company’s performance. When time is well managed, it is likely that more time will be available to perform different duties that are beneficial to the organization such as attending to more patients (Blendon, 2012). To further ensure time is well managed, employees must be competent. The competence of employees improves the general performance of the organization through better time management. The company should invest more resources in training employees to improve their skills and ensure that the company benefits from the competence through better and quality time management.

Based on its financial statements, the company has remained successful since it was formed. As the CFO, I may conclude this based on the company’s revenue, which is for the year 2011 was $6,760,222,000. For the year 2012, the net revenue was $6,961,400,000. For the year 2013, the net revenue was $7,283,822,000. Further, the earnings per share is $3.97, $4.15, and $4.55 for the year 2011, 2012, and 2013 respectively. However, the company has the ability to improve its income making abilities through improved strategies.

References

Blendon, R., Hyams, T. S., Harvard School of Public Health. Louis Harris and Associates, &        Institute for the Future. (2012). Reforming the system: Containing health care costs in an          era of universal coverage. New York: Faulkner & Gray.

Hunnicutt, S. (2014). Universal health care. Detroit: Greenhaven Press.

In Gerdes, L. I. (2011). National service. Detroit: Greenhaven Press.

USH. Universal Health Service INC. http://www.uhsinc.com/about-us/

Thondup. (2014). The healing power of mind: Simple meditation exercises for health, well-being, and enlightenment. Boston: Shambhla.