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Financial Data Analysis
Professor Michelle Gomillion
Financial Management in Health Care
HCS/577
Michele Hopkins
23-May-15

Balance Sheet

Patton-Fuller Community Hospital
Balance Sheet as of December 31
2009 and 2008
(in thousands)
(audited)
ASSETS 2009 2008 $ Change % Change Explanation of Changes Based on the Annual Report - WHY did the changes occur? (If the cell is grayed out then you do not need to provide an explanation)
Current Assets
Cash and cash equivalents 22,995 41,851 (18,856) -45% There was increased purchase of equipment using cash. This is in response to the heavy discounts offered by the equipment vendors.
Assets of limited use 27,594 41,851 (14,257) -34.07% Some of the assets were disposed due to the new acquisitions that the hospital made.
Patient accounts receivable (net of allowance for bad debts) 58,787 37,666 21,121 56.07% The new settlement/arrangement between the hospital and managed care institutions has allowed for slower payment by the managed care companies, causing this huge rise
Other receivables 87 Uncertain
Inventories 18,396 8,370 10,026 119.78% There was an underestimation of supplies by $ 1000000 as well as increased purchases of inventory to capitalise on the discounts being offered by suppliers
Prepaid expenses 95 201 (106) -52.74% Due to the payment for future supplies that were being offered on discount
Total current assets 127,867 130,026 (2,159) -1.66%
Other Assets
Funded Depreciation 137,970 167,404 (29,434) -17.58% Some assets were written down after advice from the auditors while others were disposed to create room for the new equipment which was at zero depreciation in its first year.
Held under bond indenture 73,584 75,332 (1,748) -23.20%
Property, plant and equipment 248,346 175,774 72,572 41.29% There was a huge discount offer on equipment and machinery by the vendors which the hospital responded to by purchasing more of equipment thus causing this rise.
Total assets 587,767 548,535 39,232 7.15%
LIABILITIES AND EQUITY
Current Liabilities
Current portion of long-term debt 14,599 4,185 10,414 248.84% The CFO advocated for the obtaining of more long-term debt and some of the equipment purchases were funded by debt borrowing.
Accounts payable and accrued expenses 9,198 4,185 5,013 119.78% Supplies were underestimated by $ 1000000 and there was also increased expenses on inventory in 2009 due to the discount offers.
Bond interest payable 10 10 0 0.00%
Total current liabilities 23,807 8,380 15,427 184.09%
Other Liabilities
Long-term debt 452,945 209,255 243,690 116.46% Debt was obtained on adjustable interest rate as advised for by the CFO and some was used for the purchase of the equipment being offered on discount.
Less: Current portion of long-term debt 14,599 4,185 10,414 248.84%
Net long-term debt 438,346 205,069 233,277 113.76%
Total liabilities 462,153 213,450 248,703 116.52%
Equity
Common Stock 50 50 0 0.00%
Retained earnings 125,564 335,035 (209,471) -62.52% Some of the restained earnings was also released to fund the equipment acquisition.
Total liabilities and equity 587,767 548,535 39,232 7.15%

Statement of Revenue & Expense

Patton-Fuller Community Hospital
Statement of Revenue & Expense
2009 and 2008
(in thousands)
(audited)
REVENUE 2009 2008 $ Change % Change Explanation of Changes Based on the Annual Report - WHY did the changes occur? (If the cell is grayed out then you do not need to provide an explanation)
Net patient revenue 459,900 418,509 41,391 9.81% The favourable settlement of some managed care contract disputes boosted the 2009 revenues.
Other revenue 3,082 2,805 277 9.88% There was an unrestricted donation of $ 1000000 to the hospital by a long-term benefactor from her estate.
Total Revenue 462,982 421,314 41,668 9.89%
EXPENSES
Salaries and benefits 220,752 214,129 6,623 3.09%
Supplies 74,584 71,346 3,238 4.54% The deep discounts offered by the suppliers motivated the increase, which was viewed as a way to reduce future expenses.
Physician and professional fees 110,376 107,065 3,311 3.09%
Utilities 1,200 1,164 36 3.09%
Other 1,840 1,784 56 3.14%
Depreciation & amortization (noncash expenses) 36,036 24,955 11,081 44.40% The purchase of new equipment due to the enticing discounts offered led to the writing off of some assets even as other older equipment and machinery depreciated further.
Interest 3,708 3,597 111 3.08%
Provision for doubtful accounts 14,797 13,383 1,414 This is due to the increased credit risks associated with the managed care organizations the hospital is in contract with.
Total Expenses 463,293 437,424 25,869 5.91%
INCOME
Operating Income (311) (16,110) 15,790 98.06%
Investment Income (62) 264 (326) 123.49% This was caused by the declines in the stock market and real estate markets of which the hospital has major investments in.
Net Income (373) (15,846) 15,473 97.65%

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