Ratio Excel Template
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week_8_a1.pdf
© 2015 Laureate Education, Inc. Page 1 of 3
Healthcare Financial Management and Economics
Week 8 Assignment 1 — Franklin 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 Franklin Community Hospital and analyze the organization’s financial health. Franklin Community Hospital Franklin 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.
Franklin Community Hospital Statement of Operations (in thousands) for the Years Ended December 31, 2016 and 2017
2016
2017 Revenues
Net patient service revenue $22,000
$19,000
Net assets released from restriction 1,000
800 Total operating revenues 23,000
19,800
Expenses
Salaries and benefits 11,000
8,000
Supplies and other expenses 7,000
6,000 Depreciation 2,500
2,100
General services 300
520 Total operating expenses 20,800
16,620
Operating income 1,250
4,200
Non-operating income 3,500
2,200
Excess of revenues over expenses 4,750
6,400
Increase (decrease) in net assets $4,750
$6,400
© 2015 Laureate Education, Inc. Page 2 of 3
Franklin 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 1,000
900
Total current assets 5,600
4,800
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 19,000
10,000
Total assets 31,600
20,800
Current liabilities
Accounts payable 2,600
2,100
Accrued expenses 850
900 Total current liabilities 3,450
3,000
Long-term liabilities
Bonds payable 5,600
7,150
Total long-term liabilities 5,600
7,150
Net assets 22,550
10,650
Total liabilities and net assets
$31,600
$20,800
To prepare for this Assignment: Examine the financial statements from Franklin 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 Franklin Community Hospital below, complete the “Week 8 Assignment 1 Ratio Excel Template”. Your Assignment is due by Day 7 of Week 8.
