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healthcare_finance_2.docxHealthcare Finance
EXHIBIT 4.1
Sunnyvale Clinic: Balance Sheets December 31, 2015 and 2014 (in thousands)
SELF-TEST QUESTIONS
Assets
Current Assets: Cash and cash equivalents Short-term investments Net patient accounts receivable Inventories
Total current assets Long-term investments Net property and equipment
Total assets
Liabilities and Equity
Current Liabilities: Notes payable Accounts payable Accrued expenses
Total current liabilities Long-term debt
Total liabilities Net assets (Equity)
Total liabilities and equity
2015
$ 12,102 10,000 28,509 3,695
$ 54,306 48,059 52,450
$154,815
$ 4,334 5,022 6,069
$ 15,425 85,322
$100,747 54,068
$154,815
$
$
$
$
$
$
$
2014
6,486
5,000 25,927 2,302
39,715 25,837 49,549
115,101
3,345 6,933 5,037
15,315 53,578
68,893 46,208
115,101
in assets that were financed by a total of $154,815,000 in liabilities and equity. Besides the obvious confirmation that the balance sheet balances, this statement indicates that the total assets of Sunnyvale were valued, according to GAAP, at $154,815,000. Liabilities and equity represent claims against the assets of the business by various classes of creditors, other claimants with fixed claims, and “owners.” Creditors and other claimants have first priority in claims for $100,747,000, and “owners” follow with a residual claim of $54,068,000. The right side of the balance sheet (liabilities and equity, which are in the bottom section of Exhibit 4.1) reflects the manner in which Sunnyvale raised the capital needed to acquire its assets. Because the balance sheet must balance, each dollar on the asset (left) side must be matched by a dollar on the capital (right) side.
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1. What is the purpose of the balance sheet? 2. What are the three major sections of the balance sheet? 3. What is the accounting identity, and what information does it
provide? 4. What is the relationship between assets and capital?
Healthcare Finance
EXHIBIT 4.1
Sunnyvale Clinic: Balance Sheets December 31, 2015 and 2014 (in thousands)
SELF
-
TEST QUESTION
S
Assets
Current Assets: Cash and cash equivalents Short
-
term investments Net patient accounts
receivable Inventories
Total current assets Long
-
term investments Net property and equipment
Total assets
Liabilities and Equity
Current Liabilities: Notes payab
le Accounts payable Accrued expenses
Total current liabilities Long
-
term debt
Total liabilities Net assets (Equity)
Total liabilities and equity
2015
$ 12,102 10,000 28,509 3,695
$ 54,306 48,059 52,450
$154,815
$ 4,334 5,022 6,069
$ 15,425 85,322
$100,747
54,068
$154,815
$
$
$
$
$
$
Healthcare Finance
EXHIBIT 4.1
Sunnyvale Clinic: Balance Sheets December 31, 2015 and 2014 (in thousands)
SELF-TEST QUESTIONS
Assets
Current Assets: Cash and cash equivalents Short-term investments Net patient accounts
receivable Inventories
Total current assets Long-term investments Net property and equipment
Total assets
Liabilities and Equity
Current Liabilities: Notes payable Accounts payable Accrued expenses
Total current liabilities Long-term debt
Total liabilities Net assets (Equity)
Total liabilities and equity
2015
$ 12,102 10,000 28,509 3,695
$ 54,306 48,059 52,450
$154,815
$ 4,334 5,022 6,069
$ 15,425 85,322
$100,747 54,068
$154,815
$
$
$
$
$
$
