Assignment 1
Success4real
usw1_mmha_6400_week08_assignment1_version2.pdf
© 2015 Laureate Education, Inc. Page 1 of 3
Healthcare Financial Management and Economics
Week 8 Assignment 1 — Springfield Community Hospital
Assignment 1: Ratio Analysis
It is important to understand that when interpreting financial statements, the numbers alone may not provide the whole financial picture of an organization. Instead, you must analyze the statements using ratios, which are then compared to benchmarks across the healthcare industry. For this Assignment, you examine the financial documents for Springfield Community Hospital and analyze the organization’s financial health. Springfield Community Hospital Springfield Community Hospital is a small community hospital serving a rural population. The adjusted discharges are 3.30 for the 1st year and 3.10 for the 2nd.
Springfield Community Hospital Statement of Operations (in thousands) for the Years Ended December 31, 2016 and 2017
2016
2017 Revenues
Net patient service revenue $21,000
$17,000
Net assets released from restriction 1,000
800 Total operating revenues 22,000
17,800
Expenses
Salaries and benefits 12,000
8,000
Supplies and other expenses 6,000
5,000 Depreciation 2,300
1,900
General services 200
100 Total operating expenses 20,500
15,000
Operating income 1,500
2,800
Non-operating income 3,500
2,200
Excess of revenues over expenses 5,000
5,000
Increase (decrease) in net assets $5,000
$5,000
© 2015 Laureate Education, Inc. Page 2 of 3
Springfield Community Hospital Balance Sheet (in thousands) for the Years Ended December 31, 2016 and 2017
2016
2017 Current assets
Cash and cash equivalents
$600
$400
Net patient receivables 4,000
3,500 Inventory 900
800
Total current assets 5,500
4,700
Non-current assets
Plant, property, and equipment Gross plant, property, and equipment
25,000
23,000
(less accumulated depreciation)
(18,000)
(17,000)
Net plant, property, and equipment
7,000
6,000
Board-designated funds 18,000
9,000
Total assets 30,500
20,250
Current liabilities
Accounts payable 2,500
2,000
Accrued expenses 850
900 Total current liabilities 3,350
2,900
Long-term liabilities
Bonds payable 5,500
7,500
Total long-term liabilities 5,500
7,500
Net assets 21,650
9,850
Total liabilities and net assets
$30,500
$20,250
To prepare for this Assignment: Examine the financial statements from Springfield Community Hospital. Reflect on how you will use this financial data to calculate and analyze the organization’s financial ratios. Refer to Chapter 4 of Financial Management of Health Care Organizations: An Introduction to Fundamental Tools, Concepts and Applications for additional guidance.
© 2015 Laureate Education, Inc. Page 3 of 3
The Assignment:
Using the statement of operations and balance sheet for Springfield Community Hospital below, complete the “Week 8 Assignment 1 Ratio Excel Template”. Your Assignment is due by Day 7 of Week 8.
